The Reserve Bank of Zimbabwe Governor Dr John Mangudya took the opportunity at yesterday’s public accounts committee hearing, to clearly explain the genesis of the Bond Notes hailing it as a success.
According to the Governor the bond note was a success as an export incentive and called on those calling it a failure to do more research on the Bond Notes.
Mangudya was responding to Dzivarasekwa MP Edwin Mushoriwa who asked him why he had not resigned after the bond notes had allegedly failed, as he had “promised” to do.
However, Mangudya stood firm on his claims, highlighting that bond notes did not fail as an export incentive, but were a major success as evidenced by the rise in foreign currency receipts due to their introduction.
“For starters people always want to put words in my mouth. What I said and repeat today under oath is, ‘if the bond note, as an export incentive scheme fails to promote exports in this country, I will resign,” the Governor said.
Mr Tendai Biti interjected and read a statement attributed to Dr Mangudya, published on September 16, 2016, which reads: “On this matter (bond notes), the buck stops here. We do not want this idea of giving people problems, which I make myself. Give us a chance to do what is right for this economy, to put it back on track.”
“If these policy measures fail, if the bond notes do not work out, I’m willing to resign because I am genuine about getting the economy back on track.”
Dr Mangudya retorted, by saying ‘if the bond note fails to do its work, which was to promote exports’ (I will resign)”.
Dr Mangudya said “People do not know the genesis of bond notes. The bond note is monetising the export incentive scheme. The reason why we were giving them 5 to 10 percent was to promote exports.”
In the 2018 Mid-Term Monetary Policy Statement, Dr Mangudya said a combined $743,2 million incentive was paid out to exporters who earned US$12,6 billion in forex.
Dr Mangudya also said the 1:1 value of the US dollar and bond notes had not failed, “…there is $437 million worth of bond notes and total banking sector deposits of $10 billion, implying that “what has failed is not bond notes, what happened is that the economy expanded much more than the forex generated”.
“It’s a failure of the economy to generate much foreign currency to maintain its (1:1) parity (due to Government expenditure),” he added.
More: reportfocusnews