Word on the street is RBZ Governor Dr John Mangudya is already talking of scrapping the 5% export incentive, the main reason for introducing the bond notes in the first place, because he is running out of bond notes. He has been dishing them out hand over fist not to exporters but conman! What happened, you might well ask? Child’s play really, is the simple and honest answer!
At the heart of Zimbabwe’s economic crisis, as far as the RBZ is concerned, is one thing; the country’s economic decline which has meant the nation is getting poorer and poorer and because our declining production has meant we exported less and imported more. Imports are paid in foreign currency and if you import more than you export you will end with a net flow out of foreign currency which is what we have in Zimbabwe.
Governor Mungudya’s proposal was to reward exporters or anyone bringing into the country the much needed foreign currency by paying the a 5% bonus payable in the bond notes which can only be used in Zimbabwe. Sadly, the Governor did not think through how this would work out!
a) The RBZ Governor blinked; conman sends his principle amount, P, in foreign currency which is already in Zimbabwe out of the country, to SA say. It is a crime to externalize any foreign currency but conman do it all the time!
b) From SA the conman’s partner in crime sends the foreign currency through the RBZ approved dealers who dutiful pays the conman in Zimbabwe the foreign currency plus 5% in bond notes. Conman convert the bond notes to foreign currency.
c) The RBZ Governor blinks again: conman will transfer the foreign currency from Bank A to Bank B; just to muddy the waters should the authorities want to investigate.
d) The RBZ Governor blinks again: conman transfer the foreign currency into his pocket ready for step a) above. Repeat the cycle ten times. If you have repeated the cycle ten times, go to e)
e) The RBZ Governor blinks one last time: conman send all his foreign currency, a tidy sum of P plus 50%P, out of Zimbabwe before the regime converts it all to bond notes!
When RBZ introduced the bond notes on 28 November 2016 the nation was assured only $200 million worth will be printed. If the bond notes were paid out as the 5% bonus as promised then the country should have $4 billion worth of foreign currency when the last bond notes are paid out.
Whilst the RBZ Governor is seeing all the foreign currency coming into to the country and drum his chest like a silver back gorilla thinking he has solved the country’s foreign currency shortage problems; he will soon find the money he thought was there is not there.
The RBZ should just scrap the 5% export incentive as unworkable.
The conmen are setting up their black-market stalls ready to start trading the bond notes for foreign currency; they will use their contacts to get the foreign currency at the official 1:1 exchange rate and sell to the ordinary people at the exorbitant black-market exchange rates.
The introduction of the bond notes will not solve anything for the ordinary person; at best, the economic meltdown will continue at its present pace until the underlying economic problems of mismanagement and corruption are addressed. At worst the bond notes will make life hell for the ordinary people by adding the hyper inflation worries to all the economic meltdown problems.
The introduction of the bond notes has been heaven send for the conman. In two weeks, flat since Dr Mangudya introduced the bond notes and already the $200 million in foreign currency has already been stolen under his own nose. He blinked a few times and it was gone! In a country where corruption and mismanagement are the order of the day, there are very rich pickings to be had by those who live in the shadows!