Zimbabwe: Parly Finance Chair Backs Central Bank's Bond Notes
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Zimbabwe: Parly Finance Chair Backs Central Bank's Bond Notes
by RamblerNash Tue May 24, 2016 4:08 am
Zimbabwe: Parly Finance Chair Backs Central Bank's Bond Notes
21 May 2016
Photo: Kate Lucy/AllAfrica
The phased-out Zimbabwe bearer cheques (file photo).
PARLIAMENT'S Finance Committee chair, David Chapfika, has come out in full support of under fire Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, who recently announced plans to introduce bond notes into the country's crisis-prone economy.
When he announced the plan, Mangudya said this was an attempt to ease recurrent cash shortages as well as to incentivise local producers of exportable goods.
Chapfika's committee last week summoned Mangudya to explain what many believe was government's indirect way of resurrecting the Zimbabwe dollar which was ditched in 2009 at the height of the country's economic tailspin.
When he announced the decision earlier this month, Mangudya said the notes, which are set to operate at par with the US dollar, were just a value token backed by a $200 million facility guaranteed by the Afreximbank.
While this was met with string scepticism by among Zimbabweans, Chapfika, a former deputy minister of finance, was among the few who backed the initiative.
At a panel discussion organised by a local NGO group, Crisis in Zimbabwe Coalition, Chapfika said he was satisfied Mangudya had no intentions of leading the country back to the 2008 period.
During then central bank governor Gideon Gono's era, the RBZ subsidiary, Fidelity Printers, churned out worthless bearer cheques which were promptly exchanged for hard currency on the black market.
"What makes me comfortable - the issues which I raised with the governor in my capacity as the chairman of the finance committee is that are we not going back to the Gono era and he says no. He explained in some detail which made me very comfortable," Chapfika said.
"What made me comfortable is that the printing machine is not in Harare and that the printing is going to be backed by cash; its cash covered.
"So, if any of those 200 million bond notes are soiled, or spoiled or torn, we can take them back to the German printer and they will just replace those ones only.
"He will not print anything more than the 200 million deposits that he is holding for us."
However, former finance minister Tendai Biti, who was co-panellist during the well subscribed public meeting, rubbished the decision to introduce the bond notes, adding that Zimbabwe has also gone all out to ambush the IMF which was not briefed about the country's plans to print new currency.
The international community, through the World Bank and the IMF, has been engaging Harare over its debt burden which is in excess of US$9 billion.
When Mangudya announced the introduction bond notes May 4, the IMF had issued a report in Washington which said Zimbabwe had complied with its structural benchmarks of the Staff Monitored Programme it was supervising.
"If you look at that report, the assumptions that are there, it's so self-evident that the issue of the bond notes had not been canvassed; the issue of the return of the Zimbabwean dollar had not been canvassed," Biti said.
"So as far as I am concerned, Zimbabwe has committed a fundamental breach of its undertakings and commitments with the international community such that the right thing is that there has to be a rethink of the entire engagement process with the IMF because we have changed the fundamentals, we have changed the assumptions."
http://allafrica.com/stories/201605220036.html
21 May 2016
Photo: Kate Lucy/AllAfrica
The phased-out Zimbabwe bearer cheques (file photo).
PARLIAMENT'S Finance Committee chair, David Chapfika, has come out in full support of under fire Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, who recently announced plans to introduce bond notes into the country's crisis-prone economy.
When he announced the plan, Mangudya said this was an attempt to ease recurrent cash shortages as well as to incentivise local producers of exportable goods.
Chapfika's committee last week summoned Mangudya to explain what many believe was government's indirect way of resurrecting the Zimbabwe dollar which was ditched in 2009 at the height of the country's economic tailspin.
When he announced the decision earlier this month, Mangudya said the notes, which are set to operate at par with the US dollar, were just a value token backed by a $200 million facility guaranteed by the Afreximbank.
While this was met with string scepticism by among Zimbabweans, Chapfika, a former deputy minister of finance, was among the few who backed the initiative.
At a panel discussion organised by a local NGO group, Crisis in Zimbabwe Coalition, Chapfika said he was satisfied Mangudya had no intentions of leading the country back to the 2008 period.
During then central bank governor Gideon Gono's era, the RBZ subsidiary, Fidelity Printers, churned out worthless bearer cheques which were promptly exchanged for hard currency on the black market.
"What makes me comfortable - the issues which I raised with the governor in my capacity as the chairman of the finance committee is that are we not going back to the Gono era and he says no. He explained in some detail which made me very comfortable," Chapfika said.
"What made me comfortable is that the printing machine is not in Harare and that the printing is going to be backed by cash; its cash covered.
"So, if any of those 200 million bond notes are soiled, or spoiled or torn, we can take them back to the German printer and they will just replace those ones only.
"He will not print anything more than the 200 million deposits that he is holding for us."
However, former finance minister Tendai Biti, who was co-panellist during the well subscribed public meeting, rubbished the decision to introduce the bond notes, adding that Zimbabwe has also gone all out to ambush the IMF which was not briefed about the country's plans to print new currency.
The international community, through the World Bank and the IMF, has been engaging Harare over its debt burden which is in excess of US$9 billion.
When Mangudya announced the introduction bond notes May 4, the IMF had issued a report in Washington which said Zimbabwe had complied with its structural benchmarks of the Staff Monitored Programme it was supervising.
"If you look at that report, the assumptions that are there, it's so self-evident that the issue of the bond notes had not been canvassed; the issue of the return of the Zimbabwean dollar had not been canvassed," Biti said.
"So as far as I am concerned, Zimbabwe has committed a fundamental breach of its undertakings and commitments with the international community such that the right thing is that there has to be a rethink of the entire engagement process with the IMF because we have changed the fundamentals, we have changed the assumptions."
http://allafrica.com/stories/201605220036.html
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Re: Zimbabwe: Parly Finance Chair Backs Central Bank's Bond Notes
by Kevind53 Tue May 24, 2016 10:15 am
I am sure the pooroos will take some parts of these articles out of context to try and bolster their claims about what they call the ZIM. However they will not mention some key points. These bond notes are neither printed, backed or controlled by Zimbabwe.
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