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Bond notes are just a preparation for coming Zim dollar :President

11/06/2016 20:21:00

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Addressing the second meeting of the Zanu-PF Central Committee for this year, the President said the introduction of bond notes was coming as a solution to the cash crisis, although the long-term answer would be the introduction of the local currency.

The issue of bond notes, President Mugabe said, should be positively explained to the public in light of the virulent disinformation from opposition quarters. He said bond notes would hedge against externalisation of the country’s foreign earnings by some unscrupulous businesspeople.

"We think those opposing them (bond notes) are really either politically doing so or doing so out of ignorance but we know it can work. So the issue of bond notes should be explained to our people, all the more so against disinformation which is being mounted by the opposition," he said.

"We will have bond notes backed by an amount of US$200 million secured from one of our generous banks, an African bank. So this generous African bank knows about the plan. They support it and we hope when the bond notes will come like they will certainly, prove to be the cure to the challenges we have but of course the best cure is that we have our own currency in due course.

"As our reserves grow, so will the population of bond notes, all to ensure, a one-to-one correspondence between bond notes in circulation and US dollar notes we hold in our reserves.

"The idea is to stop those crooks who were taking advantage of the availability of the US dollar in the market to spirit away. They will now have to deal in bond notes as a "surrogate" currency to the US currency we hold in our vaults. The intervention is thus well meant and calculated to protect our foreign currency earnings.

"Our country, rated second to South Africa in terms of industrialisation in Southern Africa, had abandoned manufacturing for trading because of the sanctions and other challenges that we faced there was this shrinkage of the economy and industries could not operate as before. We were reduced to producing goods for the domestic market and not enough to enable us to export.

"We thus are no longer creating wealth but trading in wealth created by other economies by way of irrational imports that were flooding and are still flooding our markets. So, it’s more of importage and to import we have to use the US dollar.

"Change was thus necessary and hence the raft of measures we have since adopted which should restore and put the ethic of productivity at the core of our overall planning." President Mugabe said the gateway to economic revival was to ensure food sufficiency.

He said intensive efforts are being made to resuscitate the irrigation infrastructure to harness water bodies in the country. President Mugabe said full productivity should be Zanu-PF’s clarion call.