Zimbabwe’s vice president Emmerson Mnangagwa has just undone weeks of careful PR by the beleaguered central bank chief by saying the about-to-be-introduced bond notes will be a currency, if a report by the official Herald newspaper is to be believed.
Faced with mounting public resistance to the notes, Reserve Bank Chief John Mangudya has frantically been trying to back-pedal. In recent days, he’s told sceptical Zimbabweans that the bond notes are just an export incentive and they’ll only encounter them in the form of change.
That is not what Mnangagwa, touted as a possible successor to President Robert Mugabe is saying.
With memories fresh of the havoc wreaked by the country’s last “currency” – notes known as bearer cheques that were printed in denominations of millions, billions and trillions of dollars – Zimbabweans are reluctant to embrace this new project. There are claims that businesses are minimising their exposure to loss by keeping as little money in their accounts as possible, for fear that it will only be issued to them as bond notes.
Mode of transaction
Spoof versions of the new notes have been mocked up by the #ThisFlag movement, with protest pastor Evan Mawarire suggesting in a tweet on Thursday they will be used to pay police fines and army salaries.
The Herald quoted the vice president on Friday as saying: “We need a mode of transaction which we can control in the country on the basis of security provided by the [African Export-Import] Bank 200 million.”
This was a reference to a claim that the notes are to be backed by a $200m facility from this bank. Mnangagwa is reported to have stressed that bond notes mean Zimbabwe “will be able to have a currency that circulates within its jurisdiction”.
The Zimbabwe Independent said on Friday that the African Export-Import Bank had not made public the terms of the facility, as it has done in the past with similar facilities extended to Zimbabwe. When reporter Bernard Mpofu telephoned Mangudya, he was reportedly told that his questions “did not help anyone”.
Mnangagwa said a legal framework for the notes was being worked out. The constitutional court has said the notes cannot be challenged in court until laws governing their introduction are in place.
