Zimbabwe Finance Minister says Zimbabwe is like a sieve- if we brought in $2 billion today, tomorrow it will have disappeared

Q & A:

HON. SEN. MAKONE: Hon. Minister I want to go back to the issue of the $200 million that is going to secure the $200 million bond notes equivalent. This money is going to be printed somewhere and theoretically, it is supposed to be one to one with the US$. How are we going to be sure that no more than $200 million worth of bond notes are going to be printed? How transparent is the process? What stops the printer from printing a billion dollars worth of bond notes and then there will be enough going around but only supported by $200 million worth? If we have got this $200 million that is going to be advanced to us which is going to be supported by the bond notes, why do we not use that money rather than the notes because if the equivalent is one to one, it means they are the same. Why not use them as US$200 million paper?

The third part concerning the same question, I know that the President might have been given an exaggerated figure of $15 billion but we take it that when he says $15 billion has been stolen from Chiadzwa, it is true. Assuming that even 10% is what was taken, which would mean $1, 5 billion that is 750% more than what we are borrowing to support the $200 million bond notes that are going to be here. Why do we not …

THE HON. DEPUTY PRESIDENT: Hon. Senator, you are not supposed to explain your question but just pose a direct question, otherwise you will be giving a speech.

HON. SEN. MAKONE: Thank you Mr. President. Why do we not use part of that money to support the $200 million bond notes in order to avoid having to borrow money which we will have to pay back even if we were to recover just a fraction of that money? Thank you.

THE MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHINAMASA): I thank the Hon. Sen. Makone for her question. I think there are a couple of them not related. I take it the procedures permit – [Laughter.] – but I will answer all the questions. First, you say the bond notes are theoretical. The reality is that the bond notes are interchangeable to the US$, which is why they are backed by a $200 million facility from Afrexim Bank. So, in value they are interchangeable, which takes me to your next question.

If that is so, you ask, why we are not just using the $200 million instead of printing $200 million worth of bond notes. The short answer is to fight leakages. Bond notes will not be used outside the country. Whereas, the $200 million – if we put it in today, tomorrow it will have disappeared. We are just like a sieve when it comes to our foreign currency which is why we are saying we issue in bond notes because bond notes circulation is limited to the territory of Zimbabwe.

I have said also on other platforms, given the fact that we are a porous market, we are over liberalised. If we brought in $2 billion today, tomorrow it will have disappeared. There are already sharks waiting for it. So, the measure is, apart from trying to support the incentive scheme to exporters, the measure is also to reduce the import bill because we are introducing a priority listing of what commodities can be bought using our foreign currency. We are hoping through the issuance of the bond notes which are relative to the volume of exports, that the leakages of our US$ will come to an end or will be reduced substantially.

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