Archive | May, 2016

BONDNOTES: ZANU PF & RBZ Governor’s complacency to think Zimbabweans are stupid!

6 May

So the RBZ is at it again – the shenanigans of printing money have come back to Zimbabwe. The Herald announced today that the Central Bank Governor had announced that the new “currency” called #Bon…

Source: BONDNOTES: ZANU PF & RBZ Governor’s complacency to think Zimbabweans are stupid!

BONDNOTES: ZANU PF & RBZ Governor’s complacency to think Zimbabweans are stupid!

6 May

So the RBZ is at it again – the shenanigans of printing money have come back to Zimbabwe. The Herald announced today that the Central Bank Governor had announced that the new “currency” called #Bondnotes would be introduced “within two months”. Well, this really should not come as a shock to anyone – it was only a matter of time before the beleaguered ZANU PF government would revert to its usual thuggery and carnivorous ways against citizens. We are now approaching the general elections; ZANU PF will need cash and the associated US Dollar expenditure cannot be sustained “with a colonizer’s currency”. Moreover, ZANU PF has been paying salaries and bonuses without any new money being brought in. To cover whatever gaps money they have incurred especially after this month’s bonus payments money will have to be printed. The printing of #Bondnotes provide a simple solution to this quagmire ZANU PF finds itself in.

My point is that these ZANU PF officials at the RBZ as well as the Ministry of Finance should not be excused as ignorant or incompetent when they execute such vile policies. They know exactly what they are doing and everything they do is well calculated and self – serving. Leave this whole hogwash about plastic money – Zimbaweans not being tech friendly bla bla. If the definition that public policy is “what a government chooses to do or not to do” then definitely these people are in charge and are fully aware of the consequences of their criminal, rogue and selfish actions.

What exactly is going on?
Nothing much! Just the usual ZANU PF voodoo economics! What Zimbabweans must understand is that the announcement of the launch of the #Bondnotes is not a knee jerk reaction to the cash crunch problem that has gripped Zimbabwean banks since the beginning of 2016. The RBZ Bank Governor and his Finance Minister, would rather have Zimbabweans believe that this is just a reaction to trying to solve the current cash flow problem. It is not!

The cash crisis is problem that was always going to be there – it’s been with us since the day Zimbabwe did away with its worthless Zimbabwe Dollar currency. What and how on earth with this comatose economy and a foreign currency which you can’t print were they expecting to have enough cash flowing around to cater for the whole country?

My argument is just that the RBZ Governor and his team at the RBZ have been planning for this process for quite some time. In the past they have intimated the re-introduction of the Zimbabwe dollar but faced resistance. They have toyed around with the introduction of the Chinese Yuan but this was not received with great enthusiasm either because Zimbabwe’s trading partners who are its neighbors would make it difficult for Zimbabwe to trade with them. So they know exactly what they are doing and have just been waiting for the opportune time to reintroduce the Zimbabwe dollar equivalent they now call the #Bondnote. In any case the #Bondcoins doing their rounds in Zimbabwe were the tester and now ZANU PF is going full throttle in their bid to cheat Zimbabweans by printing this fake worthless “currency”.

Most likely scenarios after today

Scarcity of products in Zimbabwean shops
It is not rocket science that Zimbabwean industries rely heavily on imports of raw materials from neighboring South Africa and China. For them to be able to buy the finished products and raw materials they need the elusive US Dollar. What we can be assured of in the next few weeks and months is that shops will start running out of commodities as retailers and manufacturers struggle to get hold of the much needed US Dollars needed to import their wares. So back again to long queues for cooking oil, bread, soap and what have you.

The return of the Black Market forex Trading
No economics degree is needed here. For manufacturers, suppliers and ordinary Zimbabweans to be able to go on their day-to-day business they need a reliable and universally accepted currency. If the RBZ and the banks push Zimbabweans to the edge, there is always an easy way out – Go to Ximex; Fourth Street, Kumbudzi, ERenkini and Ku Border ku Masvingo and you will be sorted. So the idiotic thinking that the #Bondnote will have the equivalent value to the US Dollar will prove to be false in the long run. Before you know it and even blink on the streets the exchange rate will be 1USD to 1.50 Bondnotes and as sure as the first grandchild will return home from Singapore the rate of the Bondnote will rise against the Greenback. And this is exactly what the government wants. The idea is to cause this chaos, print more #Bondnotes and sweep away all the forex that is circulating on Zimbabwe’s streets and leave Zimbabweans with worthless papers. The drill is well known – after a year or so the RBZ Governor will apologize and life will go on and yet Zimbabweans would have been swindled big time.

ZANU PF laughs all the way to the bank – raiding company, NGO, embassy forex accounts
The introduction of the Bondnotes alone is sinister, and the addition of clauses that 40% of remittances will automatically be converted into #Bondnotes is criminal. But who cares, ZANU PF knows exactly what they are doing. The RBZ Governor is reported to have directed banks to give pay up to a maximum of USD 1000 only at the ATMs and inside the banking halls. What they are basically doing is expropriating forex without any hassle from individual and company accounts and leaving people with the worthless #Bondnotes. The raiding of private individuals and NGO forex accounts has been done before, people have enough experience and it will be done again. It is interesting that most of the money that they will acquire will definitely go to funding government trips, allowances and other expenditures which of course cannot be carried out without forex. To maximize and justify the expenditure on these raided funds, I can assure there will be so many trips outside the country by government officials the Harare International Airport will develop potholes again.

Reduction of foreign remittances back to Zimbabwe
It would only need an idiot to listen to this crap from the RBZ Governor and still send money to Zimbabwe through the formal channels such as Western Union and the international banking SWIFT system. As has happened in the past, you can be assured that money will be deposited into banks in South Africa; Botswana and Zambia and Zimbabweans will travel to collect the cash, bring their groceries and keep their cash under their beds. The people in the diaspora send money to Zimbabwe for construction; family upkeep and so on. What you can be assured of is that major suppliers of construction materials etc. will just open forex accounts in neighbouring countries and transactions will be done from New York to Johannesburg and from Birmingham to Gaborone. It is very simple, and the Zimbabwe system will not touch a single dime and the economy will not enjoy the remittance except whatever will be acquired through taxing people for foodstuffs at the borders. Cry the Beloved country.

Increased numbers of the unbanked
The banking sector in Zimbabwe has been struggling to get more Zimbabweans banked. There is no trust at all with the banking system in Zimbabwe and thus people prefer to keep money under their mattresses and shy away from the banking system. The banking system is not trusted for a number of reasons: – not so long ago people had to produce burial orders and drug prescriptions to get cash from banks; long queues were the order of the day and people lost their savings through collapsed banks. So with the introduction of the Bondnotes, banks can say bye to the many who were being suffocated already by the punitive bank charges. Unbanked populations have the potential of driving economies underground to a point which can cripple the formal economy. It will become difficult for the cash strapped government to collect tax and the potential for corruption to rise within ZIMRA, city council tax collectors across the country, police officers etc. will just become uncontrollable. But who will care to listen?

Possible closure of international banks and staff redundancies
There is a whole politicized dimension to the #Bondnotes saga which could potentially spell doom for internationally owned banks in Zimbabwe. Look at it this way, the RBZ has the sole rights to distribute cash to all banks in Zimbabwe. With the recent debacles over indigenization with a number of “international banks with major shareholding by foreigners” it is possible that they can be suffocated deliberately by the central bank and cause them to fall into distress easily. If there is no cash, in a highly cash transacted economy like Zimbabwe, it is clear that a bank without cash will be useless to Zimbabweans. Who loses out? – definitely the staff will have to “go home” and this situation is likely to happen without any hassles what with the new labor regulations prevailing in Zimbabwe. The collapse of the so called international can only spell more doom for such a trouble economy but well who cares as long as ZANU PF survives another day.

Advise to my fellow Zimbabweans
I definitely do not know much about finance and economics but I certainly know that whatever the Reserve Bank Governor and the Finance Minister are toying around with here (BONDNOTES) will be more detrimental to Zimbabwe and its comatose economy. Whether we like it or not #BONDNOTES are coming ‘within the next two months” reportedly according to the RBZ Governor. “Within two months” can be tomorrow, it can be in a week’s time or next month but I am of the view that the vaults have been stacked already – the notices have been given and now we just await the guillotine to be brought down. The money cooking ovens at the RBZ had been too cold for a long time! Eish!

The best way to deal with #BONDNOTES:

  • Don’t put your hard-earned money in any bank in Zimbabwe if you can. Of course clearly if for example you are in the civil service, they pretty much have you by the B#&s
  • Pay for goods and services with people who will trade with you with real currencies
  • If you can do not use ZANU PF controlled banks
  • If you are in the diaspora please find other ways of getting money to Zimbabwe as cash and not through the formal banking systems

Whatever you do, don’t let these hoodlums enjoy your money for free!
Passive resistance is possible! No need for Chimurengas – just starve them of the Greenback they so much long for but CANT PRINT and burn in their vile ovens!

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