By Daniel Chigundu
Hatfield legislator Tapiwa Mashakada has urged Finance Minister Patrick Chinamasa to remove the Bond Notes adding that they have failed to serve their purpose and are causing problems in the economy.
Bond Notes were introduced a few years ago as an import incentive, to also help ease the liquidity challenges and to stop externalisation of foreign currency.
However, speaking in the National Assembly, Honourable Mashakada who is also MDC-T shadow minister of Finance said the Bond Notes have not only failed in every aspect, but have also disappeared and have no business to continue circulating in the economy.
“The second issue in my view is to decommission the bond note. The bond note is not serving a useful purpose. Apart from causing these distortions, I want to know really what useful economic value we are getting from the bond note.
“When the bond note was introduced, I said the following; it would not be at parity with the United States Dollar; it will not be one as to one and it did not happen. I also said it would not boost exports because it was said to be an export incentive; it did not boost export. I said it was not going to cure the liquidity crunch and it did not cure. So, what useful value are we still retaining the bond?
Honourable Mashakada added that the bond note is just creating unnecessary parallel market because it is a weaker currency and is not even available.
“..With due respect, it is time for government to reflect on the bond note because it is not serving its useful purpose. We do not have it in the banks; it is not curing the liquidity crunches; it is not boosting the export, what is it doing?
“It was going to be useful if government still has the leverage to print but now you cannot print it. So, we would not resolve our deficit by retaining the bond note. If we remove the bond note, then we address other confidence issues to make sure that people have got confidence and the US Dollar still stands in the banks,” he said.
Mashakada joins a long list of economists that includes Ashok Chakravati, Gift Mugano, John Robertson and former Finance Minister Tendai who have been calling for the scrapping of the bond notes.
Meanwhile, Minister Chinamasa has issued statement reiterating that government has no plans to phase out the Bond Notes any time soon arguing that the fundamentals are not yet right.
“As has been repeatedly advised by government, the economic fundamentals are not yet appropriate or ideal for the transition from the use of the multiple currency system that is supported by the surrogate currency in the form of bond notes…,” he said
Chinamasa said government is placing a lot emphasis on the economic fundamentals including enhancing consumer and business confidence under the new economic order to ensure that the needed economic fundamentals are met in the medium term.
By Daniel Chigundu