As of today, bond notes have been placed into circulation in Zimbabwe. The surrogate currency – championed by Zimbabwe’s finance minister, Patrick Chinamasa, and John Mangudya of the Reserve Bank of Zimbabwe – comes in the wake of a struggling economy, cash shortages and opposition from Tourism Minister Walter Mzembi.
“The Reserve Bank of Zimbabwe is pleased to advise the nation of the introduction of bond notes with effect from Monday, 28 November 2016,” a statement from the Reserve Bank read.
About 10 million notes in denominations of two were released as part of the first batch of the multi-currency system, for which citizens have the option of utilising US dollars, the South African rand, the euro or bond notes. A bond note has the same value as one US dollar. Throughout the day, news reports showed a mixed reaction among locals, who are said to be wary of the new form of currency as they fear it may herald a return to the original Zim dollar, which was replaced in 2009 by the US dollar. Mzembi had also raised concerns beforehand regarding the possible implications to the country’s inbound tourism appeal.
“I have already spoken to President Robert Mugabe and the Reserve Bank governor to say that [my ministry] is an exclusive situation. Special conditions apply because 70% of my source market is South Africa,” said Mzembi. “They [South African tourists] need to be motivated to come and spend in this destination. Unfortunately, they’re finding Zimbabwe uncompetitive because of the bullish nature of the US dollar against the rand.”
Suggestions to adopt the rand instead were rejected by the finance ministry, which critics such as Ashok Shakravathi, a Zimbabwean lecturer and economist, felt would be a more viable option in terms of easy adoption. In 2009, 60% of the currency circulation was made up of the rand. However, Mzembi cautioned against adopting South Africa’s currency, citing concerns that it would have a negative impact.
Travellers visiting the country in the immediate future are advised to carry cash in small denominations as there is a shortage of hard cash, which may result in vendors being able to supply change only through bond notes instead of dollars.