Harare – Zimbabwe's opposition, the Movement for Democratic Change (MDC) led by Morgan Tsvangirai has called on the government to halt the introduction of bond notes, saying this would have "catastrophic implications" on the country.
In a press statement, MDC spokesperson Obert Gutu described the introduction of the bond notes as ill-advised and "would wreak havoc on the country’s economy".
The southern African country's Reserve Bank governor governor John Mangudya recently announced that the bond notes were expected to be in circulation by the end of October.
Magunya said that by the end of December, at least $75m worth of bond notes would be in circulation.
Zimbabwe adopted the US dollar and South African rand in 2009 after inflation, which peaked at 231 million%. But the country has since run out of the US dollar notes in recent months, and hopes to ease the cash crunch by printing its own "bond notes" that will be valued in denominations of $2, $5, $10 and $20.
The "bond notes" would reportedly be equivalent to the US dollar and would be backed by a $200m facility provided by the Afri –Exim bank.
According to Gutu, the country was a net exporter which was importing more than 75% of its products, thus, an introduction of the bond notes would destroy the already crippled economy.
"…It is a notorious fact that Zimbabwe is importing not less than 75% of all its industrial, manufacturing, agricultural and food requirements. This effectively means that we are a net importer of goods; including food such as our staple food, maize meal. In order for the country to import food and other essential goods, we badly need hard currency. Bond notes are not hard currency," said Gutu.
He said that his party was "deeply opposed" to the introduction of the bond notes and supported efforts by other opposition parties to take the case to the constitutional court.
"We are deeply opposed to the introduction of this worthless currency that is, in fact, the much discredited Zimbabwe dollar by another name. In this respect, therefore, the MDC is in full support of the various political parties and other Zimbabwean businesspeople who have decided to take legal action against the introduction of bond notes," stated Gutu.
Reports indicated that the Zimbabwe Peoples First (ZimPF) led by former deputy president Joice Mujuru recently took the battle to the country's constitutional court as it tried to stop the introduction of the bond notes.
The case was expected to be heard next week.
'Zanu-PF can never be trusted'
Taking a swipe at the ruling Zanu-PF government, Gutu said that the party could "never be trusted with financial prudence and probity".
Gutu claimed that the ruling party was harbouring a "sinister motive".
He challenged the Zanu-PF government to stop the introduction of the bond notes and instead use the $200m facility provided by the Afri –Exim bank to help solve the country’s cash shortages by circulating the funds.
"If it is indeed true that the bond notes are backed by a $200m facility provided by the Afri –Exim bank, the Zanu-PF regime could simply release this amount of money into the market rather than rushing to print worthless bond notes that they say will initially be equivalent in value to $75m. The Zanu-PF regime can never be trusted with financial prudence and probity," said Gutu.
- News 24