Industrialist defends bond notes

Industrialist defends bond notes
Published: 23 July 2018
INDUSTRIALIST and United Refineries chief executive officer Mr Busisa Moyo has defended the bond note, saying the surrogate currency has never been a problem for business.

Writing on his Twitter page recently, Mr Moyo said the bond note has in fact helped businesses "in terms of change, divisibility and other medium of exchange functions."

Mr Moyo said: "The total is $300m. Our real problem is the Real Time Gross Settlement (RTGS) totalling $8 billion. This one you can't say "let's remove RTGS" its savings."

"Our companies need the bond chief. Before the bond coin, business was a nightmare. Our soaps and cooking oil were affected by this. What has helped is plastic money but it doesn't cover the whole population. On small commodities name one shop that doesn't accept bond notes," he added.

The former Confederation of Zimbabwe Industries president said removing the bond note will create further medium of exchange problems.

"It (bond note removal) only removes a perception created by ourselves and the confidence created by this removal will be short lived because our ability to buy & sell daily will become more difficult," he added.

Mr Moyo also said that it is the RTGS money, and not the bond notes, that have driven out the greenback.

"The bond note was brought in to plug the money that had already been driven out. My point is the $8 billion is the problem not the $300 million hard notes and coins," he explained.

Moyo suggested that reduced Government expenditure was the answer so that it does not fuel RTGS balances. He also believes localising and increasing productivity in the productive sectors through friendly policies for exporters, lowering upfront taxation on business, resolving the national debt and Foreign Direct Investment will go a long way in arresting cash shortages.

Mr Moyo also suggested that adopting the South African rand was the right step in addressing the imbalances.

"I am a proponent of an African Currency in the future and the rand is a logical step. We can adopt without being in the Rand Monetary Union (RMU) for now, plan to join the RMU say in 6-8 years & then push for a broader regional currency to complement African Continental Free Trade Agreement (afCTFTA)," he said.

On March 21, 2018, President Mnangagwa signed the free trade treaty in Rwanda marking the creation of the largest free trade area since the founding of the World Trade Organisation (WTO) in 1995.

However, Reserve Bank Governor Dr John Mangudya has ruled out the adoption of the South African rand as foremost medium of exchange to ease obtaining cash shortages, saying Zimbabwe is not a member of the South African Rand Union, which also has Lesotho, Swaziland and Namibia.

Dr Mangudya also said the rand cannot be a major currency because it is already in the multi-currency basket introduced in 2009.

- chronicle
Tags: Bondnotes,


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