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Zimbabwe Finance Minister Makes U-Turn on Fasttracking Bond Notes Bill

FILE: Zimbabwe's Finance Minister Patrick Chinamasa (L) addresses a media conference after meeting International Monetary Fund (IMF) Executive Director for Africa Chileshe Kapwepwe (R) in Harare, September 7, 2015.

Finance Minister Patrick Chinamasa has backtracked on his plans to fast-track the Reserve Bank of Zimbabwe Amendment Bill to pave way for the introduction of bonds notes in Zimbabwe crippled by serious cash shortages.

Chinamasa requested the House of Assembly to fast-track the Bill on Wednesday.

He now believes that the Bill should go through the normal parliamentary and public consultation processes.

Indications are that Chinamasa consulted Speaker of Parliament, Jacob Mudenda, who then made the announcement in parliament about delays in passing the Bill.

The latest move was well-received by legislators of the opposition Movement for Democratic Change led by Morgan Tsvangirai.

MDC-T vice president Nelson Chamisa, who is also the Kuwadzana East Member of Parliament, said he fully-agreed with Chinamasa’s move to ensure that members of the public are consulted before the Reserve Bank of Zimbabwe Amendment Bill is passed into law.

Chamisa said it is unconstitutional for parliament to enact laws without conducting a public outreach program.

He noted that this should be done even if parliament does not normally take into consideration people’s views when passing laws.

Harare resident, Malvin Mukudu, echoed the same sentiments, adding that it is important for parliament to conduct a public outreach program before passing the Bill into law.

President Robert Mugabe used the Presidential Powers (Temporary Measures) Act to pave way for the use of bond notes in Zimbabwe and the Bill is supposed to amend some banking laws to make the bond notes legal tender in the country.

The proposed Bill reads in part, “This Bill will amend the Reserve Bank of Zimbabwe Act [Chapter 22:15] (No. 5 of 1999) to enable the Reserve Bank, with the leave of the Minister responsible for finance to issue “bond notes” exchangeable at par value with the United States dollar, on the same basis that it previously issued bond coins.

“At the same time, the opportunity is taken to validate the issuance of bond coins currently in circulation, ‘for the avoidance of doubt’.”

Zimbabweans have been protesting over proposals by the central bank to introduce bond notes, claiming that the government is planning, instead, of re-introducing the moribund Zimbabwe dollar abandoned in 2009 due to historic inflation.

Most economists argue that the bond notes will devastate the already crumbling Zimbabwe economy.

The Reserve Bank of Zimbabwe says the bond notes are designed to boost exports.