Of Bond Age

Welcome to the Bond-Age…. You are supposed to read that as Bond Era, like the year of the Bond, and no, its not a new instalment in the James Bond movie franchise but one ought to be forgiven for thinking bondage and not of the kinky kind…

We have survived this long after the introduction of the Bond Notes surrogate currency, late last year, longer than some pessimists had pegged till collapse of our economy. Bond Notes are a surrogate currency, trading at a rate of 1:1 with the United States Dollar, introduced into the system to help ease the cash crisis. According to the Reserve Bank of Zimbabwe they are backed by a $200 million dollar facility by the African Export-Import (Afrexim) Bank, and to date $102 million worth of bond notes are in circulation.

(confession: I really have no idea what exactly that means if it is a loan or something else and its terms, I worry a little because this is how countries get economically colonised  I’ve read The Confession Of  An Economic Hitman had I heard of said bank before this… and I had never heard of the Afrexim bank before all this; well Google says it is a real financial institution  but I wouldn’t put it past responsible authorities to take creative liberties with the truth and claim to have financial backing so as to instil confidence in their surrogate currency )

The release of the Bond Notes was shrouded in quite the mist of mystery and vaguely phrased terminology like a stimulus package for Export Incentives and Cash Shortage alleviation and I remember a bank even got fined for breach of some confidentiality clause by circulating pictures of the bond notes prior to their release. Even the security features of the Bond Notes were only made public after the notes had been already introduced into the system.

An sms from the RBZ sent as part of their public awareness campaign:

Who can even make sense of that?

Strangely enough though these notes were supposed to ease cash shortages trading at a value of 1:1 with the USD (easily making the Bond Currency the strongest currency in Africa) it seems to have worsened the crisis and bank queues are even longer than they used to be, and people struggle to withdraw the weekly banking limit, of their own money. The rumour mill has abuzz with talk of introduction of  even higher denominations of the Bond Currency which are currently trading in bond coins, $2 and $5 bond notes; although the Reserve Bank has gone on record to dispel this saying they won’t do so, as that could fuel inflation.

Plastic money, is the order of the day, but it’s still the standard operating procedure to first ask the cashier if the swipe Point of Sale machines are working and if they accept your particular bank, because some banks apparently don’t play with others, and local banks are suspending MasterCard and VISA transactions outside the country or placing limits on transactions.

How about doing RTGS …one would think that something called a Real Time Transfer should be instantaneous yet they take anything from 24hrs to 14 days, where does the money disappear to? Instead of just whizzing digitally from one account to another at the click of a button like magic? What if it disappears there and never comes back, what if maybe that’s how all the cash disappeared ??? You would think is a terrible time to invest in banking, but you would be wrong, banks are making a killing, your money in the bank doesn’t earn any interest and it will probably get eroded in transactional charges every time you swipe your card, or transfer money and other hidden costs, you might even get billed for enquiring your balance… and meanwhile some banks are making double digit million dollar profits…What a time to own a bank

If you figured you could runaway from the Bank Queues and try to make a withdrawal from some unscrupulous mobile money agents, you would find they charge a “commission” on top of the transaction fees and people desperate for their cash have no choice but to pay and that’s how it starts. Mobile Money Operators say such practices are illegal and should be reported, but desperation breeds strange bed fellows; once one person is willing to pay a premium for their cash then someone else will, and then another and another and soon chaos and the parallel market thrive….

Fuel supply is quite sporadic and one can’t just waltz or rather drive to a fuel service station without checking if they have fuel cause they just might not, and you ought not be surprised to find separate queues at the same service station, one for US Dollar fuel and another for Bond Currency fuel.

Oh yeah, it also shouldn’t further surprise you to see that they are most likely to run out of Bond Currency fuel first too. They blame the Reserve Bank for not clearing their foreign currency payments to suppliers and in return the RBZ says it works on some priority list where not all foreign currency payments are equal; some payments are more important than others….

The RBZ FOREX Priority list

Officially there is no parallel rate though in effect there is, by offering discounts for cash transactions as opposed to using plastic money which basically translates to cash being worth more. Unofficially there is a multi-tier pricing where there same product has a different pricing depending whether you are using plastic money, United States Dollars or Bond Currency. This is illegal and an RBZ amendment act was passed into effect  which will see perpetrators being jailed for “devaluing” the Bond Currency.

That’s some Bondage for you