The RBZ Governor John Mangudya remains defiant not to resign despite the seeming failure of the bond notes (and bond coins). The currency had lost more than 50% of its value before it was converted into the RTGS dollars late last month.
But yesterday, the Governor seemed to imply that people misquoted him when he talked about his resignation back in 2016. Rather than resigning over the failure of bond notes (through losing their value), Dr. Mangudya promised he would resign if the bond notes failed as an export incentive. During a Public Accounts Committee, the Governor was asked why he hasn’t resigned yet as he promised to do in 2016, the Herald reports that he said:
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’
Mr Chairman, on this one we can disagree because for me it was very simple. The export incentive scheme in this country has worked. “We need to go and call companies that are exporting, and bring them here with me and (say) whether (or not) the incentive scheme failed.
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.
However, that statement is different to what he actually said in 2016 when was talking about his resignation. Time-traveling to 2016, you can see that Dr. Mangudya actually said:
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.
Do you see this glaring difference from his two statements? Despite the Governor’s inconsistencies, a Press Release sent out in 2016 advising the public of the introduction of Bond notes explicitly stated that bond notes are an export incentive- as what Dr. Magudya said yesterday. A section of the 2016 Press Release read:
The Reserve Bank of Zimbabwe is pleased to advise the nation of the introduction of bond notes with effect from Monday, 28 November 2016. The bond notes will be released into the market through normal banking channels in small denominations of $2 and $5 to fund export incentives of up to 5% which will be paid to exporters of goods and services and diaspora remittances.
Now the question as to whether the bond notes are successful with regard to the export incentive is contentious. The RBZ Governor’s argument is that exports have since grown by at least 35% since the introduction of bond notes, which is a success based on the RBZ’s success and failure perimeters.