Bond Notes: Are the fears genuine? - Part 2

By Lenin Tinashe Chisaira

Gov. John Mangudya of the RBZ at the launch of bond coins in 2014

In this part 2 of this writer’s bond notes opinion, there is need to look at how the law should be used to protect the aspirations and needs of the ordinary person and not just those of the elites. The law must be flexible. Hence this part will invoke some basic legal arguments for the practical need for bond notes by the bank-queuing public. One must hasten to remind the reader that the writer is openly supportive of radial economics and anti-neo-liberalism.

The law must serve the ordinary people.

Zimbabwe is founded on respect for certain values and principles (section 3 of the Constitution of Zimbabwe) which values include recognition of the worthy and inherent dignity of each human being and respect for the country’s diverse cultural and traditional values. The state must ensure that its people, especially pensioners who selflessly built the nation in their younger years, must be able to enjoy comfortable lives devoid of indecent queues and the indignity of cash shortages. Section 68 of the Constitution provides for the right to administrative justice. The elderly, and the workers and peasants are equally entitled to administrative conduct that lessens burdens on their lives and that is prompt in addition to being impartial, proportionate to the extent of the economic problems and reasonable in a real economic crisis.

The Law must be progressive and responsive to the aspirations of the people, including economic aspirations. Therefore, the government of the day, the Reserve Bank of Zimbabwe (RBZ), big business, professionals, elites, etc. must be pro-people and organic in their conduct. The law should never have a narrow and inflexible interpretation.

It is within the rights of the central bank to safeguard hard currency since it is prone to abuse by business and the elites. Section 49 (1) (b) of the RBZ Act gives the RBZ the power to maintain international reserves which can be in the form of foreign exchange in the form of notes or coins or account balances held by the bank in foreign currencies. It suffices that the Constitution already gives the central bank the powers to regulate the monetary system, to protect currencies in the interests of balanced and sustainable economic growth and to formulate and implement monetary policy. (Section 317(1) of the Constitution.) The RBZ, as the institution empowered by the Constitution and by Section 47 of the Reserve Bank of Zimbabwe Act [Chapter 22:15] to deal with exchange rates and monetary policies in Zimbabwe must indeed be a bank of the ordinary people. The RBZ must act to ease the suffering of the people in a cash shortage environment. It must come up with measures that address bank queues; that alleviate the plight of people who are travelling long distances to banks and who will be awaited by hungry families and dependents.

Flexible solutions

Rather than mere fault-finding, there is need for the Zimbabwean society to understand that the Zimbabwean crisis needs wholesale reforms in the long run. But in the short run there is also need to strategically built our economy through flexible and creative solutions that alleviate the plight of our people.

Lenin Tinashe Chisaira

Big business needs to incentivise or re-initiate the use of currencies such as the South African rand. Businesses that import goods from South Africa, should likewise mostly sell their goods locally in SA Rand, rather than in US dollars. Instead of mere denigration of the use of bond coins and notes and amplifying their disadvantages in the import sector, business should rather encourage the wider usage of alternative currencies such as the Rand. The rand fell into general disuse some time ago yet Zimbabwe gets a whopping 60% of its import from South Africa. For the sake of economics not politics, big business need to explains how currencies which were both at 49% usage at the start of the official multi-currency era in 2009, later transformed into a 95% usage for the US dollar versus 5% usage for the Rand in 2016.

The banking and financial service sectors need to encourage people to adopt the use of plastic money. Ecocash and Steward bank are commendable in this respect. These sectors should also encourage the use of real time gross settlement (RTGS) services. In that regard it is critical that points of sale machines be available in almost all places where cash transaction ordinarily, including rural areas, farms, mines, shops, service stations, vegetable markets, council offices and growth points.

All this is not hidden or bookish information. The problems is when vocal people overlook economic and legal information that is available in the public domain. The capitalist system is one that requires research and reluctantly, some caution, before we unwittingly make life difficult for the ordinary bank-queuing person through narrow elitists legal interpretations, ignorant alarming and massaging the ego of big business and the elites.

Last but not least- Arrest the Corrupt.

On another note, and beyond economics, it is worthwhile for the government and the central bank of Zimbabwe to note that public confidence in them has been eroded. Everyday news features scandals of massive abuse of public resources. The culprits always seem untouchable. Without doubt, if government changes course and starts fighting corruption through imprisonment of perpetrators and recovery of stolen assets, the trust may come back. Economics is about people and the solutions should mainly centre on the ordinary, working people.

[Lenin Tinashe Chisaira is a lawyer and former student leader at UZ. He is a student of Economic Regulation and writes here and at www.africafightnow.org  in his personal capacity. Twitter: @LeninChisaira]