HON. SEN. TIMVEOS: My question to the Minister of Finance and Economic Development is I am worried about bond coins and bond notes that want to be introduced in this country. I am sure every Zimbabwean is worried. I want to seek clarity on this issue, how are you going to make sure that when you have introduced these notes, you make sure that they stay with the value they have, to begin with. This is in view of the fact that I am looking at a country whereby US$15 billion can just disappear just like that. Maybe the bond notes will be okay at first but because we do not have a solution on corruption, it will then end up without value.
My question might appear to others like…
THE HON. DEPUTY PRESIDENT: Order! Can you go direct to your question?
HON. SEN. TIMVEOS: I think the Minister has understood where I am coming from, so I want assurance from the Minister and more understanding on these notes. I am sure the whole of Zimbabwe wants to know. I thank you
HON. CHINAMASA: I want to thank the Hon. Senator for asking this question because it is affording me an opportunity to clarify and clear a lot of misconceptions that have arisen through the announcement by the Central Bank Governor.
I am sure the public and a lot of Hon. Senators here, have missed the major thrust of the measures that were announced. We do not print the United States dollar in this country. When it started appreciating, it created problems for us and it appreciated when the currency of our largest trading partner South Africa, had a precipitous fall. So we were caught between a rock and a hard place. In order to address that issue, we realised that our foreign currency market was over-liberalised. So the major thrust of the measures that we announced is to start a process of managing our foreign currency and prioritising its usage. Our foreign currency earnings come from primarily five commodities, tobacco, gold, platinum, ferrochrome and diamonds. In other words, what we earn is hard earned; that foreign currency is hard earned.
However, as it was in an over-liberalised economy and market, we found that we were just being used as a fishing pond by other countries, unscrupulous traders and also that the currency was being used as a store value like I mentioned in answer to an earlier question. It was not being used as a medium of exchange. We use the United States dollar here to fund domestic transactions including kutenga mazhanje, ipwa, magaka, which no other country does. Other countries build volts to keep and store United States dollars as a reserve currency. In this country we were just open and therefore, open to any abuse. So, the measures we are taking are to correct that situation.
Coming to your specific question Hon. Senator; I am not worried and you should not be worried about the issuance of bond notes. To start with, they will not lose their value – when they are introduced, they will be just like the bond coins. When you asked, you also said you are worried about bond coins and I thought that was a slip of the tongue, I think you meant bond notes. Yes, initially, when we introduced bond coins, there was a lot of concern and resistance. Eventually, people came to demand issuance of bond coins, so the reaction that we are receiving, including the concerns you expressed, the worry; these were anticipated. Whenever new things are coming in, we expect people generally to be averse to change even where change is in their interest.
So, we do appreciate your concern and generally it is arising from what happened in the past, 2007/8, but I would like to say to the Hon. Senator and to this august House, we should never be a prisoner of the past. The past should give us lessons and we should be able to use those lessons not repeat the mistakes which were made yester year.
So, the value will not change, when the bond notes are issued, they are only issued as an incentive to exports. The source of our foreign currency, of our United States dollars comes currently from two sources, exports and Diaspora remittances. Diaspora remittances are not coming in a structured manner, the only foreign currency that comes in a structured manner is export because these are supervised and regulated by the Reserve Bank of Zimbabwe. So, we want to give incentives to exporters so that they can increase their production and exports. When we issue the bond notes, they are only going to be relative to the volume of exports that are being generated. If Hon. Senator, you export US$100 worth of goods, we will give you US$5 on top so that your balance in the bank will reflect US$105 in order to incentivise you to produce more for exports so that we increase the stock of United States dollars.
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