Zimbabwe: Of Trust and Bond Notes

23 September 2016
opinion

Reserve Bank of Zimbabwe governor Dr John Mangudya mentioned the phrase "trust and confidence" more than six times in his 85-page Mid-Term Monetary Policy Statement delivered last week. Dr Mangudya has always emphasised that the restoration of public confidence was "vital and imperative". No wonder he themed his monetary policy; "Walk the Talk to Restore Trust and Confidence".The RBZ chief faces probably one of his most challenging times since he assumed office two years ago. And the issue that is probably giving him sleepless nights is none other than the introduction of bond notes into the economy. However, Dr Mangudya is convinced that the measure to introduce export incentives in the form of bond notes will solve a number of challenges that Zimbabwe is currently facing.

He argues that the introduction of an export incentive scheme of up to 5 percent to promote the export of goods and services will help sustain the economy's capacity and ability to generate foreign exchange to meet its domestic and foreign requirements. Dr Mangudya believes that the export bonus scheme to be awarded to exporters of goods and services will address the challenges of low productivity and promote exports with the overall aim of liquefying the multi-currency exchange system.

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