HomeBusinessBond coins spark outrage

Bond coins spark outrage

-

ECONOMISTS and informal traders have warned that new bond coins worth $10 million that are set to make their debut on Thursday might face stiff resistance from the public as there is lingering suspicion on the government’s motives.

nqobile bhebhe
CHIEF REPORTER

Four coins have been unveiled by the Reserve Bank of Zimbabwe (RBZ) in denominations of one, five, 10 and 25 cents.

Their value would be on a par with US cents and are only for local use.

Zimbabwe has exclusively used foreign currency for all transactions since early 2009 after the Zim dollar was rendered worthless by a world record breaking hyper-inflation.

The US dollar, South African rand and Botswana pula are the main currencies used, although five other currencies are permitted: Yuan, rupee, yen, Australian dollar and pound sterling.

The government says the introduction of these coins is aimed at solving the problem of change in most shops where customers are forced to accept sweets or ballpoint pens.

However, critics suspect backdoor attempts to reintroduce the Zimbabwe dollar.

Godfrey Kanyenze, an economic analyst, yesterday said while the coins would be convenient for the public, especially on the issue of change, there is deep mistrust about government operations.

“Bond coins are convenient for the public, especially on the issue of change. However, it requires discussion and education so that they can be accepted. People no longer trust this government anymore after what happened in 2009 when their pension funds were just wiped away,” Kanyenze said.

“Therefore, government should have sat down with the users like businesspeople and companies, but that did not happen. It’s because the government does not take people seriously and it does not consult, so people are suspicious.”

He said since the coins were bonded, they could not be used for imports meaning that most business operators might face difficulties re-stocking. A new 50 cent coin would be in circulation in March 2015.

The Bankers’ Association of Zimbabwe (BAZ) has welcomed the introduction of the special coins saying they are being “issued purely to alleviate the current shortage of small denomination in the economy”.

BAZ’s Sam Malaba said the coins would have no effect on cash withdrawal limits.

“The public is advised that current banking limits as regards cash withdrawals will not be changed as a consequence of the introduction of the bonds. The coins have been issued purely to alleviate the current shortage of small denomination in the economy, which has resulted in recorded inefficiencies and a huge cost to consumer welfare,” Malaba said.

Zimbabwe Chamber of Informal Economy Association Matabeleland region chapter president Edward Manning said the coins would add no value in Bulawayo where coin shortages were minimal.

“We have never been short of coins in Bulawayo as compared to Harare where people used to get tokens. So I don’t understand why they are bringing in these coins at a time when they are not needed. If there is a change problem in Harare I hope they will absorb all these coins,” Manning said.

Manning said informal traders might struggle to replace their stock.

“As informal traders, we import most of our goods, but these coins will only work in Zimbabwe so if I get a huge stock of the coins how will I be able to replace my stock? I was speaking to a shop owner this morning (on Monday) and he declared that he would not accept bond coins and I think that attitude will be adopted by most businesspeople here,” he said.

Recent Posts

Stories you will enjoy

Recommended reading