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ZIMBABWEANS - well, most of them - are up in arms about the Reserve Bank of Zimbabwe (RBZ) and Robert Mugabe's government wanting to introduce bond notes as a medium of exchange.
The RBZ and government are accused of wanting to introduce the abandoned Zimbabwean currency through the back door.
Zimbabweans also believe the RBZ will act in cahoots with government or will be arm-twisted into printing more than the $200m worth of bond notes it is talking about.
Some citizens, including former vice-president Joice Mujuru, last month took the RBZ and government to court, seeking to have government barred from introducing the bond notes which are due to start circulating sometime in November. The case was however thrown out as premature and speculative.
The court ruled there was no factual basis in the likelihood of applicants' fundamental rights being infringed, given that there is no reason to prove the executive is going to act unlawfully by introducing bond notes without following due process.
Government has since taken its cue and is now crafting a law ahead of the introduction of bond notes.
Other citizens, led by pressure groups such as Tajamuka and ThisFlag of Pastor Evan Mawarire fame, at one point took to the streets, demonstrating against the introduction of bond notes.
For their troubles, protesters were allegedly brutalised by the anti-riot police, with some arrested and jailed for days and one, Linda Masarira, for months.
But why are Zimbabweans taking to the courts and the streets to fight against the bond notes? Why is the subject so contentious that it has dominated social media debates and occupied pages and pages of newsprint?
While government and the RBZ have tried several times to give the assurance that the bond notes will help address the cash crisis as well as help boost exports, Zimbabweans have remained highly averse to any local currency as they are still traumatised by the 2008 hyper-inflationary era. So bad was the experience that even RBZ governor Dr John Mangudya has acknowledged that Zimbabwe is a financially traumatised society.
"Zimbabweans had lost confidence in the banking sector" and were no longer prepared to risk keeping their money in financial institutions because of “traumatic past experiences", he said then.
Between a rock and a hard place
However, given the above background I still think government might as well go ahead and introduce the bond notes. I believe we are already in an untenable position, akin to the situation of biblical lepers of old who decided to risk going to the enemy's camp to escape famine in the city, rather than just stay where they were and wait to die.
Currently Zimbabweans are in exactly the same situation as the lepers. They might as well ask themselves the same question: “Why do we sit here until we die?”
If they say no to bond notes, cash transactions will soon come to a halt because United States dollars are fast disappearing from the system. The much-needed imports will also stop as forex accounts get depleted. Already petrol is becoming scarce, with fuel stations not getting adequate supplies.
The RBZ imports $15m worth of notes weekly, in addition to what banks import on their own. But “hard cash” levels continue to fall, with the RBZ saying as at September 15 2016, banks held cash of around $120m although $250m had been imported since May.
Notes are being siphoned from the system while some individuals are reportedly selling hard cash at a premium. On the other hand, banks have since reduced withdrawal limits to as little as $50, according to reports.
All this is in addition to a malignant economic environment characterised by job losses and closures. So, let government introduce the bond notes and if they work, it’s still good for Zimbabweans.
And if the facility is abused as expected, then it will accelerate the demise of the current government; the economy will die and in the process provide the much-needed endgame for President Mugabe and his government.
* Malcom Sharara is Fin24’s correspondent in Zimbabwe. Views expressed are his own.
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