Confusion as Zimbabwean ‘bond notes’ introduced

By John Cassim

HARARE, Zimbabwe (AA) - The first batch of “bond notes” were released Monday as Zimbabwe attempted to address a cash shortage in the country.

One note is equal to a U.S. dollar -- the currency in use since Zimbabwe abandoned its own dollar seven years ago amid rampant inflation but now quickly diminishing as people move cash out of the country.

By mid-morning most banks had started issuing two and five dollar denominations as $10 million worth was introduced into circulation.

The Reserve Bank of Zimbabwe has imposed a $50 daily restriction per customer.

There were early reports that some retailers had refused to take the new notes, citing security fears.

Retail giants Pick n Pay and OK Zimbabwe declined to comment but staff told Anadolu Agency that instructions had been given not to accept the bond notes for fear of counterfeits.

“The management has given us instructions not to accept the bond notes because we are yet to know which security features to take note of,” a shopworker at Pick n Pay said on condition of anonymity.

Street vendors were accepting the notes for fear of losing out. “Although there is little knowledge of the security features, when customers started using them we had no choice for fear we would lose business,” Innocent Chatamisa, a Harare fruit seller, said.

Bright Ngwerude, who runs a fleet of buses in the capital, said he was happy for his staff to accept the new notes as long as gas stations took them as payment.

When the notes were first announced in May, huge protests erupted against President Robert Mugabe. Opposition parties, workers and civil society groups are planning further protests this week.

Economist John Robertson said it was too early to tell what affect the new notes -- which cannot be used outside Zimbabwe and which the government has said are not a currency -- would have on the economy.

“It’s a bit early to tell but I think the people who will carry the answer would be commuter omnibus operators,” he said.

“If they can’t use bond notes to buy fuel then millions of Zimbabweans would be annoyed and begin to reject the bond notes, so we need to give it a few more days.”

He added: “Advertisements were placed in newspapers on Sunday on how these new notes would look but there is a problem of distrust. Nobody trusts this government so they might have to overcome the problem over the next few days.”

The Zimbabwean dollar was abandoned in 2009 as inflation spiraled into nine figures and the government issued a 100 trillion dollar note.