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In Bond We Trust?

Nearly a decade on from the worst postcolonial turmoil that saw their currency devalued by thousands of percentage points, Zimbabweans have had to brace themselves as the government introduced another face-saving tender. The bond note, pegged at equal value to the US dollar, but not legal outside the country, is traded more often in comic sketch or as the source of derision, than in markets. Fungai Machirori reports from Harare.

A security guard stops me as I exit one of the popular fresh food shops at Harare’s upmarket Avondale shopping centre.

“Sister, you look like someone I can ask this question. Do you have a moment?”

I am confused by the request, but also a little curious. And so I decide to indulge her.

“Do you think these bond notes will take us back to 2008? Do you think God can let us suffer again like that year?”

She apologises for her candour. Such confronting enquiries (in Zimbabwe, at least) would ordinarily be softened by meandering pleasantries and chitchat, but it is the day that bond notes – after many months of speculation – have been released into circulation. And it is probably this that has emboldened her to be forthright in her questioning. In 2008 – a year that most Zimbabweans still associate with the nation’s worst postcolonial social, economic and political turmoil – she tells me she lost family members whose medical costs she could not meet because of the acute cash crisis of that time.

“I buried too many people then and I don’t want the same thing to happen ever again.”

I am not sure what to say, so I tell her what little I know about how the bond notes have been described to work. Through various media supplements and jingles, the Reserve Bank of Zimbabwe (RBZ) has framed bond notes as a financial measure intended to ease the cash shortages that have seen many Zimbabweans spend whole days and nights in bank queues; sights which had, until last year, remained a spectre of 2008.

A surge in government borrowing, large tranches of misappropriated funds, inhibitive policies for external investment and poor export performance have collectively led to a critical shortage of cash in Zimbabwe’s multicurrency economy which has largely thrived on transactions made in US dollars since 2009. Bond notes are thus proposed as a means to plug this gap.

At the same time, they are intended to serve as a financially-related incentive. Pegged at a rate of 1:1 with the dollar, one of the main schemes associated with the bond notes is a performance-related bonus of five per cent as a way of incentivising large scale exporters, particularly within sectors such as tobacco farming. Also, to encourage diaspora remittances (said to already contribute about ten per cent of the nation’s GDP) through more formal channels, the RBZ has also introduced the Diaspora Remittances Incentives Scheme that is envisaged to reward money transfer agents and recipients of such transfers.

And yet many issues continue to colour the public’s perception of the new tender.

One of the biggest concerns surrounding the introduction of bond notes is the fact that many people do not understand what exactly this new tender is, or how it differs from the discontinued and distrusted Zimbabwe dollar. In the build-up to the issuance of the currency, the RBZ had assured that its introduction would be contingent upon citizens’ satisfactory understanding of its purpose. However, formal notice of the date of introduction of bond notes was only provided to the public two days before the currency entered the market. A bank whose employees leaked the first – and only – public images of the currency the day before its official launch, received a US$500,000 fine from the RBZ, with all involved employees being summarily dismissed.

Although media coverage – through public radio and TV jingles, posters and billboards – has increased over the last few months, this has done little to allay general fears and ensure comprehensive public awareness. Bond notes were further conspicuous by their absence from President Robert Mugabe’s year-end state of the nation address. Uncertainty is exacerbated by some retailers, who have either refused to accept bond notes from customers, or have created dual payment systems with lower prices offered to those able to make cash payments in US dollars.

Another sticking point is the pegging of the currency, only recognised as legal tender within Zimbabwe, at the same rate as the US dollar. Finance Minister Patrick Chinamasa stated in the weeks running up to the note’s introduction: “If one owes you money in US dollars, you must accept payment in bond notes. You cannot refuse.” However, in a News Day piece by Zimbabwe’s former finance minister, Tendai Biti, and international policy analyst, Todd Moss, the two opine that since bond notes are not legal tender anywhere outside of Zimbabwe, they cannot logically hold an equal value to the US dollar, a global currency. In essence, they conclude that bond notes are certain to devalue over time, pushing up their exchange rate to the dollar. Such a scenario would inevitably offset further USD shortages and hyperinflationary conditions.

Yet another source of discontent is a lack of clarity about how ordinary citizens will benefit from the issuance of bond notes. Some say they only see the currency favouring large-scale exporters through the export incentive. As a result, there are suspicions that bond notes are not intended to serve the general public’s interests, but rather niche interests and those of the government.

That there is a disconnect between the perceived interests of citizens and the government is telling of a nation that in 2016 broke into atypical public protest, driven in great part by the rise of the #ThisFlag citizens’ movement led by Pastor Evan Mawarire, whose sentiments resonated deeply with many Zimbabwean social media users. Prior to bond notes becoming legal tender, #ThisFlag printed and circulated its own version of the notes – derisively called “bond nots”. Featuring images of provocative figures such as the president and the first lady, Grace Mugabe, among others, the faux currency was intended as a form of protest against the government’s financial mismanagement. The real currency is facetiously referred to as “bondage notes” or “Bob notes”

With such rising frustrations, and the emergence of public humour as a staple of survival, it is no surprise that alternative media genres – in the form of comedy and satire – continue to grow as sources of entertainment and social commentary around the new currency. In a skit produced by the popular Bustop TV, a character known as Comic Pastor stands accused of hoarding the paper used to print bond notes from South Africa. After repeated interrogation, it is found that it is actually reams of bond paper that he is in possession of. In yet another skit, by Magamba TV, bond notes are explained through the analogy of two popular sadza accompaniments, high-end oxtail and the more economical kapenta (Tanganyika sardine), whose equivalent value as relish is brought into humorous question.

For a people who have practised “mattress banking” and watched their savings and salaries devalue to worthless bricks of bank notes before, bond notes elicit all too real feelings of apprehension and angst. Popularised in 2008, “cash burning” – a system of selling US dollars in cash at a premium payable via bank transfer – has returned and the environment for a thriving black market continues to grow. And while a plastic economy, or cashless society, is becoming more evident, this remains a difficult culture to adopt among a people largely distrustful of formal institutions such as banks and the government. Moreover, for those most affected by this cash crisis – making their living through the small scale and/or informal economy – paper cash remains a paramount currency for everyday life.

The night before the bond notes were released, I tweeted my personal corruption of the popular poem, “A Visit from St. Nicholas”. I wrote:

‘Twas the night before #bondnotes,

when all through the house,

not a creature was ready, not even a mouse.


This was retweeted almost 50 times and responses of uncertainty exchanged. Now, a few months later, there remains general distrust, albeit amid relief that the currency continues to trade (at time of writing) at 1:1 with the US dollar.

I am not sure if any part of my explanation about the bond notes allays the security guard’s fears that Monday evening when we meet. But soon we are both having a laugh, recalling the bizarre events of our lives back in 2008. I tell her of the time I fainted as I stood in line for bread during an intense heat wave. And she reminds me of that difficult winter when basic foodstuffs like salt became luxuries, when airtime cost trillions of dollars. We part on this note, and wish each other well, committing the fate of our nation – with cautious hope – to those beyond our conversation.

Zimbabweans have known the surreal experience of moving through empty grocery aisles, the sight of derelict shelves and freezers at each hopeful turn. They have also known the indignities of buying bread and milk and eggs at illicit vending spots in unsanitary lanes where the drunk and incontinent release their waste.

For now, food remains abundant and high-end shops and shopping complexes continue to make brisk business. Even if most Zimbabweans can’t afford much beyond the basics, it is still a small comfort that on the surface, all remains ordered and calm.

At least for now.

This piece appears in the Chronic (April 2017). To purchase in print or as a PDF head to our online shop.

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