14 March 2018

Zimbabwe: Mangudya Hails Bond Notes

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya says bond notes have been successful since they have helped companies to increase both production and exports.

Dr Mangudya said this when he appeared before the Parliamentary Portfolio Committee on Finance and Economic Development yesterday.

The introduction of bond notes in 2016, he said, was not meant to deal with cash shortages.

"I said when bond notes fail to support export incentives in this country, I would resign and you know we have many companies that we have been resuscitated, and I can mention them," he said.

He said the bond notes had materially impacted on the fortunes of companies such as Tregers, Paramount Garments, Lobels and Mega Pack, Arenel and Zimplow.

"What the people were ascribing to, which I do pray to honourable MPs not to do, is to say that it has failed to remove queues in the banks.

"Once you do that, you are saying print more. But what we are saying is our bond notes are governed as a proportion of exports, so when I say bond notes, I celebrate because I see the image of exports, it is a brilliant mechanism," he added.

Dr Mangudya said he would provide Parliament with a schedule of the companies that had benefited from the export incentives, including the demonstrable growth in exports since the introduction of bond notes.

"I haven't resigned because the bond notes have succeeded in helping the companies in Zimbabwe to be resuscitated," Dr Mangudya said.

He added that bond notes will be in use until Government reintroduces the local currency.

The parallel market for foreign currency, he said, was a result of high demand.

The central bank chief said there are currently more than $290 million bond notes in circulation.

Dr Mangudya also welcomed the passing of the Finance Bill by Parliament, saying it would help deal with errant dealers who are involved in multi-tiered pricing.

The Bill is now awaiting Presidential assent.

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