Zimbabwe’s new finance minister considering scrapping bond notes, what you need to know…

HARARE (Reuters) – Zimbabwe’s new Finance Minister Mthuli Ncube may scrap the quasi currency bond note and liberalise exchange controls as part of reforms he plans to implement by end of this year, a state-owned weekly newspaper reported on Sunday.

The southern African nation, which dumped its currency in favour of the U.S. dollar in 2009 following years of hyperinflation, introduced bond notes in November 2016 in a bid to ease acute shortages of cash. The shortages have, however worsened while a black market continues to thrive.

The notes are backed by U.S. dollars loaned to the government by the African Export and Import Bank, and can be used like cash.

Officially, they are pegged to the dollar at a rate of 1:1, but on the street $1 fetches up to 1.50 in bond notes.

“I am very clear that there have to be currency reforms and the current currency approach is not working,” Ncube told the government-owned Sunday Mail.

He said he would explore three options: either Zimbabwe joins the South African rand union; uses only the U.S. dollar while removing bond notes from circulation, or reintroduces the Zimbabwean dollar.

Ncube however said a local currency would only be introduced when the country has enough foreign reserves and achieves macro-economic stability. Zimbabwe currently has two weeks import cover, according to central bank data.

Ncube, a former senior executive with the African Development Bank, was appointed by President Emmerson Mnangagwa on Friday and is expected to lead Zimbabwe’s economic recovery programme.

He was not immediately available to comment when Reuters tried to contact him.

A dwindling supply of cash dollars has led to banks limiting daily withdrawals to as little as $30 in bond notes. Companies are struggling to pay for imports and foreign investors cannot repatriate dividends or profits.

There are $350 million worth of bond notes in circulation, according to latest central bank figures.

Reporting by MacDonald Dzirutwe; Editing by Kirsten Donovan

Related Content

Coronavirus: African Union Member States reporting COVID-19 cases As of 26 May 2020, 9am EAT

Central (12,167 cases; 343 deaths; 3,226 recoveries): Burundi (42; 1; 20),Cameroon (4,890; 165; 1,865), Central African Republic (652; 1; 22), Chad (687; 61; 244), Congo (487; 16; 147), DRC (2,297; 67; 337), Equatorial Guinea (719; 7; 22), Gabon (2,135; 14; 562), Sao Tome & Principe (258; 11; 7) Eastern (12,809; 349; 3,409): Comoros (87; 1; 21), Djibouti (2,468; 14; 1,079), Eritrea (39; 0; 39), Ethiopia (655; 5; 159), Kenya (1,286; 52; 402), Madagascar (542; 2; 147), Mauritius (334; 10; 322),

Coronavirus – African Union Member States (54) reporting COVID-19 cases (112,290) deaths (3,359), and recoveries (44,920)

African Union Member States (54) reporting COVID-19 cases (112,290) deaths (3,359), and recoveries (44,920) by region: Central (11,906 cases; 340 deaths; 3,094 recoveries): Burundi (42; 1; 20), Cameroon (4,890; 165; 1,865), Central African Republic (604; 1; 22), Chad (675; 60; 215), Congo (487; 16; 147), DRC (2,297; 67; 337), Equatorial Guinea (719; 7; 22), Gabon (1,934; 12; 459), Sao Tome & Principe (258; 11; 7). Eastern (12,291; 332; 3,295): Comoros (87; 1; 21), Djibouti (2,270; 10; 1,064

Coronavirus – Zimbabwe: COVID-19 update, 24 May 2020

Download logoHighlights of the situation report Two (2) new recoveries were reported from Harare. 282 RDT screening tests and 219 PCR diagnostic tests were done. The cumulative number of tests done to date is 37039 (21484 RDT and 15555 PCR). To date the total number of confirmed cases remains at 56; recovered 25, active cases 27 and 4 deaths, since the onset of the outbreak on 20 March 2020. Number of Tests Done Number of Confirmed Cases Number R

Coronavirus: African Union Member States reporting COVID-19 cases As of 25 May 2020, 9am EAT

Central (11,416 cases; 334 deaths; 3,051 recoveries): Burundi (42; 1; 20),Cameroon (4,400; 159; 1,822), Central African Republic (604; 1; 22), Chad (675; 60; 215), Congo (487; 16; 147), DRC (2,297; 67; 337), Equatorial Guinea (719; 7; 22), Gabon (1,934; 12; 459), Sao Tome & Principe (258; 11; 7) Eastern (12,189; 332; 3,283): Comoros (87; 1; 21), Djibouti (2,270; 10; 1,064), Eritrea (39; 0; 39), Ethiopia (582; 5; 152), Kenya (1,214; 51; 383), Madagascar (527; 2; 142), Mauritius (334; 10; 322),

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

CNBC Africa celebrates 13 years on air

Today, June 1st marks our 13th Anniversary at CNBC Africa. As we celebrate our work and experiences at a time when the world is subdued by the coronavirus, here are views of some of our top analysts and friends from over the years....

Capital Appreciation’s Bradley Sacks on COVID-19 impact on business

Capital Appreciation, a JSE fintech player raised its final dividend by over 17 per cent following an increase in annual revenue and profits. The payment solutions provider saw increased demand for its digital and cloud based services and said the Covid-19 pandemic has not impacted earnings negatively. Bradley Sacks, Joint CEO at Capital Appreciation joins CNBC Africa for more.

COVID-19 lock-down: This is how much SA’s alcohol ban cost the economy

After a two month ban on liquor sales, stores reopened today and thirsty consumers were waiting in line to replenish their stock. While the industry expects liquor sales to spike in the coming days, the ban on sales during the Covid-19 lock-downs has cost over 117,000 jobs. That’s according to the South African Liquor Brand owners Association (SALBA). SALBA CEO, Kurt Moore joins CNBC Africa for more.

Absa May manufacturing index surprises

The rand is rallying. Eight million people are back at work. Petrol will cost one rand and eighteen cents per litre more from next month and the latest Absa Purchasing Managers Index business activity sub-index rebounded to 43.2 in May after collapsing to an all-time low of 5.1 in April. The magnitude of the increase is surprising, given that most parts of the manufacturing sector could only operate at 30 per cent of employment capacity in May due to lockdown. Miyelani Maluleke, Economist at Absa Corporate and Investment Banking joins CNBC Africa for more.

Partner Content

Sanlam Emerging Markets and its partners on the African continent invest over $12 million to fight COVID-19

As we go through this global pandemic together, it is the little things we miss. A high five, a handshake, a walk...

VIVO CEO is a dynamic leader for this innovative global brand

May 2020 -- Six months ago the vision for vivo in South Africa was just beginning to...

Trending Now

The business book billionaire Bill Gates wants you to read right now

“In my experience, it is rare to find one that really captures what it’s like to build and operate an organization or that has tips you could really put into practice,” says billionaire and Microsoft co-founder Bill Gates.

Why Germany’s coronavirus death rate is so low | CNBC Explains

While Germany has one of the highest numbers of coronavirus cases in Europe, its death rate is significantly lower than its neighbors. CNBC’s Timothyna Duncan explores the strategies the country has employed to manage the spread of the disease. ----- Subscribe to us on YouTube: http://cnb.cx/2wuoARM Subscribe to CNBC International TV on YouTube: https://cnb.cx/2NGytpz Like our Facebook page: https://www.facebook.com/cnbcinternational Follow us on Instagram: https://www.instagram.com/cnbcinternational/ Follow us on Twitter: https://twitter.com/CNBCi...

“Stop this culture of frivolous allegations” former World Bank Treasurer Arunma Oteh defends African Development Bank President

"So my appeal really is that we dispense of this issue. That we stop this culture of frivolous allegations around the times of elections. And allow the African Development Bank to support the African continent at this important time.”

How LGBTQ+ Pride Went From Movement To Marketing

With all of the changes to this year’s Pride lineup, many are left wondering how these virtual events will maintain their support of small LGBTQ+ owned businesses, like restaurants, bars, and brick-and-mortar stores, as well as LGBTQ+ focused nonpr
- Advertisement -