Why Zimbabweans have to wait for bond notes until October

Q & A

HON. SEN. B. SIBANDA:  Could I find out from the Minister of Finance and Economic Development how correct it is, that we have to wait until October for the bond notes to be in circulation and what are the reasons for that wait?

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA):  Thank you Mr. President Sir and I want to thank the Hon. Senator for asking that question.  Yes, it is correct that we should expect issuance of bond notes towards end of September-beginning of October.  This is so because, to get bond notes printed, it goes through various stages which include designing, origination and then printing.  The firm authorised or contracted to produce the bond notes advised us that it would take that long.  My apology of cause is that I have admitted on other forums and I think it is a mistake.  The mistake was that we made pronouncement on the issuance of bond notes prematurely.  I would have much preferred, with the benefit of the hindsight that we had done so to almost about the time we were issuing.  Thank you Mr. President Sir.

HON. SEN. MUMVURI:  Thank you Mr. President.  I want to thank the Minister for that answer.  Now that there is time before the bond notes issuance, is there anything which Government is doing to mount awareness campaigns, especially to the rural areas, so that by the time you introduce this, everybody is in the know and we are able to support this including the Members of Parliament here.

HON. CHINAMASA:  I want to thank you Hon. Senator for that advice and it will be taken to heart.  We will certainly take the opportunity to mount awareness campaigns in the rural and in the urban areas, as well as amongst Members of Parliament.  I must add Mr. President that we have had a very robust debate on the bond notes.  This is something that I treasure because it has helped us basically, to refine and clarify our own thoughts on the matter, so I am very delighted that we have had this kind of debate over this issue.  I want to assure the Hon. Senator that efforts will be made to raise awareness amongst the stakeholders.  I thank you.

HON. SEN. MAKORE:  With regard to transactions of companies, within the liquidity that they will be having within their company, bond notes could be more than the US$ that we are using.  Is it transactable that at least those people can buy commodities from outside using those bonds?  Perhaps I can find clarity from the Minister.

HON. CHINAMASA:  Firstly, I think I need to clarify to this august House that we have adopted a multi-pronged approach to addressing the cash shortage.  One of the approaches is to encourage the use of plastic money.  As I speak, over the past four or five weeks, we have seen a quantum leap in the usage of plastic money – an increase of more than 400 percent.  We are encouraging Hon. Senators here to resort to the use of plastic money because this will reduce the demand on the US dollar which as you all know, we do not print.  With respect to the specific question about transactions, the Hon. Senator needs to be advised again that, we are encouraging corporations and the greater portion of the plastic money usage has been popularised amongst corporates.  We hope that this multi-pronged approach will go a long way to assisting and reducing the demand on the US dollars.

Additionally, we have a multicurrency system which became dysfunctional largely because the appreciating US dollar came to dominate the situation here; exacerbated by the fact that it was not circulating, people just come to withdraw, they do not come to deposit.  For an economy to run, you must have a currency which is circulating.  A unique challenge for Zimbabwe – by the way we are only one or three countries which use the US dollar for funding, both imports and domestic transactions but the trick always is, the money should circulate.  We use the US dollar both, as a store value, as a medium of exchange and to fund our imports.  Increasingly, people are taking money out of the financial service sector and storing it for value.  That is what has created the problem, hence the promotion of plastic money.  Thank you Mr. President.

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