Harare - Zimbabwe could be stacking up its new bank notes to a value of $2.5 billion but they will lose their value almost as soon as they're released onto the market, a senior Movement for Democratic Change (MDC) official has claimed.
Reserve Bank of Zimbabwe governor John Mangudya has always maintained that the bond notes - supposed to be on a 1:1 parity with the US dollar - are to be paid out as an incentive to exporters and will not have a total value of more than $200 million.
But Eddie Cross, who sits on parliament's budget and finance committee, and is the opposition's shadow minister for local government, told News24 in an interview: "$200 million would not even touch sides."
Cross claimed sources at the RBZ gave him the $2.5 billion figure. He said it would be needed to restore liquidity to the market. "But the moment it [bond notes] is issued, it will be worthless," he said. His figure would be hotly contested by the central bank chief who at the end of last month urged Zimbabwean businesses to set up an independent commission to make sure there was no "overprinting."
Officially the release date for the notes was around October. Coincidentally, a senior labour ministry official Simon Masanga told the Chronicle newspaper last week that payment of salaries to Zimbabwe's civil servants would normalise "two or three months from now".
Cash shortages have led to repeated delays in salary payments and to tight caps on the amount of money Zimbabweans are allowed to withdraw from their accounts. Some banks only allow clients to take out $50.
"Pretty soon when you go to the ATM it'll spew out bond-notes," Cross said, claiming "paper money" had already been printed and was sitting in warehouses. Given widespread resistance to the notes from ordinary Zimbabweans, the authorities may be delaying their release because they were terrified of what will happen, Cross alleged.
Memories were still fresh of unchecked banknote printing during the pre-2008 hyperinflation era. Few believed President Robert Mugabe's government would stick to the publicised $200 million limit. Mangudya claimed that the notes would be backed by an African Export-Import Bank facility. Zimbabweans demanded proof of this.
State media on Wednesday quoted the head of the Apostolic Churches Council of Zimbabwe Johannes Ndanga as urging Zimbabweans to accept bond notes "while challenges in the country are being fixed". Other church leaders have spoken out against the notes.
The use of plastic money surged by 400% between May and June, according to Finance Minister Patrick Chinamasa recently.
Calls for Zimbabweans to use the South African rand instead have not been well received. Though large supermarkets would accept foreign currencies apart from the US dollar (adopted as legal tender in early 2009), smaller stores do not.