Citizens view on bond notes

staff reporter

IMG_20160919_102934[1].jpg

dealers selling clothes and cell phones at Ximex Mall

Tafara Mukanganise is a 23 year old Zimbabwean who spends most of his time in the Harare business district at Ximex Mall. He sells second hand cell phones that he imports from Zambia but when he is not doing that he works as a driver. His duties include collecting cars in Tanzania and delivering to owners in various parts of the country.

Like many Zimbabweans he is worried by the imminent introduction of the bond notes as announced by Finance Minister Patrick Chinamasa and Reserve Bank Governor John Mangudya.

Bond notes have struck terror in the hearts of many Zimbabweans who think that the country is reverting to the use of the Zimbabwe dollar. Many people suffered wealth erosion during the Zimbabwe dollar era and there were  shortages of basic commodities such as sugar and mealie-meal.

The government has announced that $75 million worth of bond notes will be on the streets by the end of October. It will be issued out in different denominations such as $2, $5, $10, $20. The bond notes are said to be aimed at preventing illicit flows of the United States away from the country.

In Zimbabwe most of what is consumed is imported from other countries. Zimbabwe main imports are: motor vehicles and machinery, fuel and foodstuffs. Government has said that the drought situation has forced it to import more maize further ballooning the import bill. Without productivity improving on the farms the import bill will either stay the same or increase.

With 90 percent of the economy ‘informalised’, the bond notes are likely to affect small businesses and ordinary people. 33% of the informal sector is retail and wholesale and this includes vendors littering the streets of Harare selling  fruits and groceries. Tuck shops and other home based businesses will be affected by the bond notes because it will curtail the ability of ordinary people to import and re=stock their businesses. Other sectors such as manufacturing which have to import raw materials could also be affected.

The Reserve Bank has already said it will allocate foreign currency according to its own set of priorities. For example dividends and imports for raw materials will be prioritised over importation of vehicles meaning those people currently selling vehicles and those involved in the clearing of these cars may find themselves stranded by the end of October. Freight companies, clearing agents and even drivers who were driving cars from different countries are worried about what will happen to their livelihoods.

At Ximex Mall in Harare, most of the young men who work as ‘transporters’ are worried that their business will be affected. Tafara regularly travels to Tanzania to pick up second hand cars on behalf of his clients in Zimbabwe. He takes the opportunity to import second hand clothes and cell phone accessories that he sells to dealers in Harare.

“We don’t know what will happen to these businesses after the bond note. It will become more difficult for us small people to cross the borders with foreign currency and buy our things “said Tafara

A local Pharmacy proprietor also expressed concern over whether his business would continue to function when the bond note comes. He imports medicines without a license and this has kept his business afloat. Some of the medication he sells includes contraceptives and other medicines imported from South Africa and China.

Peace Chikuni who runs a fleet of 4 pirate taxis in the Harare business district says that he fears for his business. ‘How are we going to replace these cars or to buy parts when we no longer have access to foreign currency’ he asked.

What worries some Zimbabweans is that while foreign currency will become inaccessible to ordinary people, but will be available to the politically connected and powerful.  Already the Ministry of Trade and Industry is issuing import licenses to importers who wish to import things into the country. More than 4000 import licenses have been issued and these licensed importers may be the only ones accessing foreign currency.

Not everyone is complaining about the impending bond notes. Money changers at the international bus terminus Road Port can’t wait for the introduction of the bond notes. They say that the bond notes may bring back the fortunes of 2008 where many Zimbabweans made fortunes out of foreign currency dealing.

While bond notes represent a threat to some people’s livelihoods others see opportunity in the impending changes.

Ends//

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s