Zimbabweans are up in arms over the government’s move to re-introduce the disgraced Zimbabwean dollar ‘through the back door’.
The governor of the Central Bank, John Mangudya, recently remarked that the country was going to issue notes of up to 200 million US dollars, a move he says was meant to ease cash crisis.
Mangudya said the bond notes, that will be in denominations of $2, $5, $10, $20, will be in circulation within the next two months.
Many believe this move clearly demonstrate the Robert Mugabe regime’s failure to arrest the economic crisis and now looking for a way to introduce the local currency abandoned over five years ago.
The move has sparked widespread outcry from Zimbabweans both within the country and in the diaspora, with a number of campaigns underway demonstrating dissatisfaction.
A Harare based political analyst told CNBC Africa that the move would never succeed.
“This is the return of the Zimbabwean dollar by another name. It won’t work. It will crash on day one,” said the analyst who chose to remain anonymous for fear of victimisation.
Former Finance Minister, Tendai Biti, called on citizens to act saying this was the time for all Zimbabweans to be angry, very angry.
“The return of the Zimbabwean dollar marks the gross admission by this regime that it has failed and failed in absolute terms and that it will drag everyone along in the plunge to abyss that now awaits this economy. It is a cynical, disrespectful and contemptuous move that has absolutely no logic, sense or justification on any rational ground whatsoever,” wrote Biti on his Facebook wall.
He added that the challenge Zimbabwe was facing had to do with a dead production.
“Zimbabwe is effectively a supermarket economy consuming goods produced in other countries. In 2014 its exports were $3.7 billion against imports of $6,3 billion.2015 was no better. Exports were $3.2 billion against imports of $6,03 billion.”
Political Economist, Maxwell Saungweme weighed in saying the thinking process of the Harare administration was troubling.
“This is a shack down; casino economy presided over by dangerous clowns who don't see beyond today. How can you explain repeating of a failed experiment of 2008 of printing dollar signs and figures on bond paper and declare that as currency? Really? Do these people learn at all?,” questioned Saungweme.
Nqobani Ndlovu, a journalist, says from vendors in the streets to the men in suits, there is scepticism that this precursor to the Zimbabwean dollar re-introduction.
The feeling is that, the regime is testing the market, thus starting with these few bond notes, before they flood the market after acceptance. Just like with the bond coins, they were scarce at first but once the market accepted them, government flooded them,” says Ndlovu.
“The other thing is that, whether one is getting a meagre salary or not in US$, the fear now is that going forward they will be paid in bond notes which they cannot use outside the country's borders. Its good news though for the money changers as they see this is a God-sent to boost their money changing business.”
As is his custom, ZANU PF propagandist, Professor Jonathan Moyo, was all out on twitter defending the bond notes saying the administration would keep coming up with solutions while others keep coming up with their usual hot air.
On one of his many tweets, Moyo said the country had no fundamentals to bring back the dollar, attempting to allay fears of many.
Promise Mkwananzi, Director, Zimbabwe Informal Sectors Organisation, says the policy ambivalence and confusion of Harare administration had been laid bare.
"The tragic result is that there is already panic and despondency in the country. This will cause an unprecedented decline in FDIs already at its all-time low this will see the Zimbabwean economy continuing to suffer."
Other than the issue of bonds, Zimbabwe is facing a flurry of other issues that are worrying investors such as lack of clarity on what will happen when Mugabe (92) goes.
Zimbabwe last used own currency in January of 2009. At that time every Zimbabwean had become a billionaire if not trillionaire, but all this didn’t mean anything as 90 percent we in abject poverty.