We should worry when details and documents proving that Barclays Branches are having forms that are made for both Bond Notes/Coins Deposit. The Barclays are issuing the numbers of the bank and the address of the bank. The other issue is that the Bond Notes are accounted on the value of coins deposit or another currency. Not the value itself on the Bond Notes. The Bond Notes are valued together with another currency, if it is South African Rand and United States of Dollar.
The Worry with seeing the form that Barclays Limited Zimbabwe has created this form where they are valuing the Bond Notes and also separating it. This is happening as the Republic already is lacking enough of the Bond Notes. Some are even questioning if this is the first start of a parallel economy and so you know what that means: “Parallel economy, based on the black money or unaccounted money” (Your Article Library).
So the values might be turned or changed as transactions have become more costly in Zimbabwe as well:
“The value of transactions processed on Zimbabwe’s National Payment System (NPS) increased from $1,2 billion to $1,5 billion as the volume of transactions went up by 13 percent in the week the Reserve Bank of Zimbabwe (RBZ) introduced bond notes, a report by the central bank has shown” (…) “The RBZ has said it will release a total of $75 million worth of bond notes by the end of this year.” (Zimbabwe Mail, 2016).
With the cash-shortage and the promised delivery together with the volume of transactions in Zimbabwe proves the Reserve Bank of Zimbabwe wasn’t ready, neither we’re the Hon. Patrick Chinamasa has to keep up his promises and deliver a grand policy to revitalize the economy.
“The RBZ has increased the rate of printing with the latest batch of notes worth $7million being delivered at Harare International Airport in the last few days a Ukranean Jet. But the development will worsen the plight of safari operators who have already experienced a 25 % slump in business this year” (ZimEye, 2016).
Since the Tourist doesn’t trust the currency, neither does the locals as the government and finance ministry are keeping the secrecy around the production and cost of the currency doesn’t add to the faith in the Zimbabwean Bond Notes, as the draconian state tries to silence the #NoBondNotes and #Tajamuka are getting real. The batches worth $7million of Bond Notes haven’t done what they we’re supposed to do, as they cannot even create trust between the citizens and the financial institution.
The Comment from the Independent are clear on the Bond Notes: “Government domestic debt — which stood at US$3,7 billion as at October 2016 — is clearly unsustainable. In a normal economy, Treasury Bills (TBs) are a useful short-term instrument for raising funds via open market operations. But in Zimbabwe’s case, TBs have not been deployed prudently. In fact, TBs are a ticking time bomb. Long before bond notes spooked the market, the authorities were churning out TBs which, to all intents and purposes, were effectively a local currency by another name” (The Zimbabwe Independent Editor, 2016).
So when the Government has this massive debt and delivers a little bunch of currency that isn’t trusted because of secrecy, the reality is also that the Zanu-PF haven’t really tried to be honest about their approach on the Bond Notes. They seem like a giant loan from the Afreximbank who borrow the funds so the Finance Minister Chinamasa could afford to chip the monies on the public. So the public and citizens are in the paying for the added debt for a currency, which isn’t valued by anybody. Even the banks operating in Zimbabwe is making ready for a parallel economy with the Bond Notes. As we can question as the Barclays of Zimbabwe has separated the foreign currency and the new note.
In July 2016 the Afreximbank:
“The RBZ has said the bond notes, which will trade a ratio of 1:1 with the greenback, are backed by a $200million Afreximbank bond facility, from which they derive their name” (New Ziana, 2016).
So now the first batch was $7million worth out of the proposed $200million loans used to put the Bond Notes to the citizens of Zimbabwe, which I have proposed from the get-go is added in the debt into the hands of the citizens as they get indebted with the notes and also with the surging government spending.
There aren’t clear indications that the bond notes will add anything positives, as even the banks are now showing resistance and proving their little faith in the currency. Not only the citizens, but also tourists, visitors of Zimbabwe don’t even trust it.
Like this example:
“The informal traders lament that they are slowly losing faith in the new currency as it has been posing a myriad challenges towards their business, which is solely hinged on imported wares” (…) “The flea market traders import various wares from neighbouring Mozambique, mostly second hand clothes and shoes” (…) “Murayirwa further added that it becomes a challenge since the Mozambican Bureau de Change only cross rates US$ against Meticals” (…) “This is an unnecessary headache. Bond notes are going to kill our business. This business is supporting close to 1,000 breadwinners. Most of the people here were formerly employed by the major industries that closed and they had no choice but to come here to support their families. Yes we understand that government is trying to solve cash challenges in the country, but they are doing so at the expense of thousands of other families whose businesses are in jeopardy now,” said Murayirwa” (Nehenda Radio, 2016)
The Zimbabwean citizens struggle with paying and exchanging monies to importing things to sell at the markets, as proven with this example. The small-scale entrepreneurs who are important at markets to sell needed products at a decent price; they cannot do so if their currency isn’t valued. Therefore the trust of the Bond Notes is lower than when they we’re introduced.
The reasons are the secrecy and the uncertainty of the effects on the market as it was unleashed to the people. Still close to a month after the release there isn’t any proof of any good coming out of the currency, other than surely some unknown Zanu-PF cronies earning fortunes on it! Peace.
Nehenda Radio – ‘Traders decry loss of business because of bond notes’ (15.12.2016) link: http://nehandaradio.com/2016/12/15/traders-decry-loss-business-bond-notes/#sthash.cEnubUzE.dpuf
New Ziana – ‘Afreximbank to state position on bond notes’ (01.07.2016) link: http://www.herald.co.zw/afreximbank-to-state-position-on-bond-notes/
Your Article Library – ‘What is the Meaning of the Parallel Economy?’ link: http://www.yourarticlelibrary.com/economics/what-is-the-meaning-of-the-parallel-economy/2720/
The Zimbabwe Independent Editor – ‘Govt’s budget a non-starter’ (16.12.2016) link: https://www.theindependent.co.zw/2016/12/16/govts-budget-non-starter/
ZimEye – ‘Secret Bond Note Printing Accelerates’ (16.12.2016) link: https://www.zimeye.net/secret-bond-note-printing-accelerates/
Zimbabwe Mail – ‘Value of financial transactions up 23pct following bond notes injection’ (15.12.2016) link: http://thezimbabwemail.com/banking-finance-34021-value-of-financial-transactions-up-23pct-following-bond-notes-injection.html
Not only that the Harare Central Police are using their water-canons on the demonstrators today in the main streets of the capital. The pictures of Bond Notes coming from South Africa have not been enough with the leaked photos online. Therefore the Parliament and Hon. Mnangagwa and Hon. Chinamasa wouldn’t’ answer fellow MPs on their questions about the production of the currency. Secondly a big mining corporation will not start to sell their exported gold from Zimbabwe with bond notes, but continue to trade them with US Currency.
Disclose the Printing:
“Mnangagwa was responding to a question in the National Assembly from Binga North MP, Prince Dubeko Sibanda (MDC-T), who wanted to know if the government would not end up printing bond notes in excess of the $200 million Afrexim Bank facility” (…) “MPs should not be worried because government will restrict itself to the amount of bond notes anchored on the $200 million facility,” he said” (…) “Those of us who feel uncomfortable using bond notes should continue using the United States dollar because bond notes and US dollars are interchangeable. If you have no faith in bond notes, why not continue using the currency that you have faith in?” (…) “Mnangagwa said whenever the RBZ governor deals with monetary policy issues, he has legal authority to transact with other central banks in the world for the benefit of the country” (Langa, 2016).
Still selling gold with US Currency:
“Caledonia Mining Corporation Plc (LON:CMCL TSE:CAL) said there will no effect on its payment arrangements following the recent introduction of bond notes by the Reserve Bank of Zimbabwe” (…) “Since the start of 2014, Caledonia has had to sell all gold produced from its 49%-owned Blanket mine to Fidelity Printers and Refiners Limited, a subsidiary of the RBZ” (…) “ So far all sale proceeds have been received within 48 hours of delivery to Fidelity in US dollars at a price which is 98.75% of the London afternoon “fix” on the day after delivery” (Whiterow, 2016).
Current events as well:
It was also supposed to be One United States Dollar to One Zimbabwe Bond Note (1:1). But only days after the price on the black-market because of the lacking funds in the capital and in the nation of the new currency, the trading value is 1.25 to 1 Bond Notes. Together with the allowed taking out 300$ at the ATMs in Harare, but during today the limit where 150$, so the cash-strapped society continues even as the unleashed new currency hitting the streets. At Stanbic Branches outside you could get max 40$ Bond Notes and inside 25$ Bond Notes. So the issues of clearing the economy has apparently not hit yet. The lacking funds and coins are truly a phenomenon that Zimbabwe doesn’t easily shake out of.
So the easy launch and creating trust after the failing economic climate has showed to be hard on the Zanu-PF regime who has been vultures and eating heavy of the plate. That is something they still do and continues with, therefore the public distrust is genuine and expected. President Mugabe tricks cannot salvage this if the Public has no faith in the currency and not even the big bread-winners doesn’t change their cash-flow. The proof is if the major mining corporations and supermarkets don’t use or accept the Bond Notes. If so then the issue of Bond Notes is flawed. That we can hope, because the Bond Notes is just adding debt and giving the economy a fake push that the citizens would pay and not the government themselves. Peace.
Langa, Veneranda – ‘We won’t disclose where bond notes are printed: Mnangagwa’ (01.12.2016) link: https://www.newsday.co.zw/2016/12/01/wont-disclose-bond-notes-printed-mnangagwa/
Whiterow, Phillip – ‘Caledonia Mining says no impact from Zimbabwe’s new bond notes’ (01.12.2016) link: http://www.proactiveinvestors.com/companies/news/169819/caledonia-mining-says-no-impact-from-zimbabwe-s-new-bond-notes-169819.html