Bond notes threaten ailing safari sector

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A Zimbabwean man shows off new bond notes outside a bank in Harare on November 28, 2016. Picture: Philimon Bulawayo/Reuters

THE introduction of bond notes and the uncertainty surrounding the introduction of the promissory currency will worsen the plight of safari operators who have already experienced a 25% slump in business this year, businessdigest has learnt.

Kudzai Kuwaza

The surrogate currency went into circulation two weeks ago. The Reserve Bank of Zimbabwe (RBZ) said it is meant to ease cash shortages, plug externalisation and money laundering following reports that nearly US$2 billion was siphoned out of the country last year.

Concerns, however, have been raised over the secrecy surrounding the term sheet between the RBZ and Afreximbank on the US$200 million facility purportedly backing the bond notes and the failure by the authorities to appoint an independent committee supervising the circulation of the bond notes as announced by the central bank governor John Mangudya.

Safari Operators Association of Zimbabwe president Emmanuel Fundira told businessdigest on Wednesday that the introduction of bond notes in murky circumstances would aggravate the parlous state of the sector hard hit by the continued ban on ivory hunting by the United States as well as the ban by airlines on the transportation of ivory.

“There is too much dust around the issue of bond notes and there are too many things that are unclear,” Fundira said. “After having suffered a significant 25% drop in business, the state of the safari sector will definitely be worsened because people who are coming to do business here are people who have options to go elsewhere.”

He said the uncertainty created by the bond notes would result in the sector going into 2017 “terribly disadvantaged” as foreign clients remain uneasy over the surrogate currency. The price disparity for products with an import component such as fuel where some are charging more for fuel bought through swiping with a bank card than that bought with cash are creating distortions in the market which would send the wrong message to their foreign clients, he said.

Reservations over the use of bond notes are growing with some saying the troubled country should have adopted the rand.

“I can understand what the government is trying to achieve in terms of inducing liquidity in the market, but the multiple currency basket already has nine currencies including the rand, which I have always submitted is part of the solution to the extent that 70% of our exports go into South Africa or via South Africa, 70% of our imports come from South Africa and 80% of our diaspora, globally, are resident in South Africa and, therefore, they have an impact on the profile of remittances into Zimbabwe,” Tourism minister Walter Mzembi said on South African television news channel ANN7 in October this year.

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