Source: Fidelity Mhlanga, NewsDay
The Reserve Bank of Zimbabwe (RBZ) is finalising the signing of a tripartite agreement with the African Export Import Bank (Afreximbank) and printers ahead of the introduction of bond notes this October, deputy governor Kupukile Mlambo has said.
RBZ wants to introduce bond notes under a $200 million facility guaranteed by Afreximbank in which exporters would get an additional 5% of their export proceeds in bond notes.
Addressing delegates at the Institute of Chartered Accountants of Zimbabwe winter school in Victoria Falls on Saturday, Mlambo said it would not be possible for Zimbabwe to go beyond the stipulated amount, as it would dent the regional bank’s reputation.
“There is a tripartite agreement being finalised between RBZ, Afreximbank and printers. This is because they have a reputation to protect. So it won’t be prudent for us to go beyond that amount,” Mlambo said.
The introduction of bond notes has raised fears that government wants to retrieve the Zimbabwean dollar it retired last year.
Bank executives, depositors and business leaders have also condemned the introduction of bond notes.
Mlambo said even though the country secured a $50 million facility for bond coins, it has imported $30 million worth of bond coins.
He said the largest sources of liquidity included exports comprising of tobacco, gold, chrome, platinum and diamonds with some of them affected by low international prices.
“Zimbabwe is becoming less globalised. We are trading less with other economies. Foreign Direct Investment (FDI) has been below potential due to lack of trust and uncertainty,” he said.
Last year the country recorded $435 million in FDI down from $545 million in 2014.
Trade imbalance at $3 billion, fiscal deficit, low external inflows and low confidence in the economy had exacerbated the cash crunch, according to Mlambo.
He said the central bank was not holding onto cash responding to theories that RBZ was doing so to promote the use of plastic money.
“If Never [Nyemudzo CBZ Holdings chief executive] and George [Guvamatanga Barclays Bank managing director] were here they would testify to that. The governor [John Mangudya] has been saying if I have taken your money come and take it,” he said.
As of May this year, Mlambo said, bank deposits stood at $5 billion.