ZIMBABWE ISSUES NEW BOND COINS

Special coins issued by Zimbabwe's central bank have gone into circulation in the run-up to Christmas.

Zimbabwe abandoned its currency in 2009 due to hyperinflation and mainly uses the US dollar and South African rand.

But with very few coins for these currencies in circulation, shoppers are given change in sweets or pens.

The central bank governor said there were no plans to reintroduce the Zimbabwean dollar and the new coins would be pegged to the US dollar.

John Mangudya said $10m (£6.3m) worth of bond coins - in one cent, five cent, 10 cent and 25 cent denominations - had so far been distributed to banks.

"Through the introduction of change in small denominations we are expecting to see self price corrections," Mr Mangudya is quoted by The Herald as saying on Thursday.

The coins, referred to as “Bond coins” are produced in denominations of 1, 5, 10 and 25 cent values with a fifty cent coin expected to be released into circulation in mid-2015. The coins are supposedly backed by a “Bond” from which they derive their name from – with a US$50 million bond coin facility that the Reserve Bank claim they have arranged for the purpose of providing the coins with intrinsic value. The need for the coins were two-fold, first, due to the chronic shortage of coins and prompting businesses and shopkeepers to give out pieces of candy as change or to round up or down to the nearest Dollar; and two, as a deal with the US treasury to transport a substantial value of US coins to the sanction-ridden country fell through, the Reserve Bank decided to produce their own coins. Commissioned from the South African Mint, the coins are expected to make up about 2% of the Southern African economy – which has seen its GDP decreasing year for year for at least the last two decades.

The bond coins were unveiled by the Reserve Bank’s Governor, John Mangudya who commented that the circulation of the coins would be limited to Zimbabwe and would only have legal tender status within the country, further adding that the coins would be equal in value to US cents, trading one for one. Mangudya also stressed that the bond coins would therefore “be a good store of value” and encouraged the public to accept the coins in daily transactions since consumers and businesses would be able to exchange the coins for paper money at their banks.

The initial amount of Bond coins to be made available will be US$10 million which is scheduled to be released into general circulation between December and March 2015.

Under normal circumstances, the proportion of coins to money in circulation in an economy is between 20 to 25% but with the initial release of the Bond coins during this time-frame, the overall percentage of coins is expected to equal about 2%. As Zimbabwe is in reality a Dollarized economy, the country in practice uses an array of currencies such as the British pound, South African rand, Botswana pula, Japanese yen, Chinese yuan, Indian rupee and the Euro. With an increased level of the Bond coins entering circulation, it is expected that the ratio of coins to banknotes will increase to just under below 10% of total bank deposits.

I’m not sure if my article put fourth my own disdain for the Zimbabwean government who – has systematically pieced apart a once thriving and expanding economy in just fhe first decade or so in power – with so much going for it which ZANU & Mugabe inherited from post-independent Rhodesia. They have utterly ruined a whole nation, its people and destroyed any possibility for the future of this Southern African would-be giant with the blatant corruption, dictatorship, political and civil oppression and criminal behaviour never seen in parts of the world practising democratic principles and even setting new heights for the third or developing world.

It seems to me that perhaps Mugabe at 90 years old is running out of time and of course money so… this is perhaps as it has been termed “a backdoor” method of re-introducing some kind of national currency to raise funds for his personal use or that of his wife who it seems – may be taking over for her corrupt husband. Yes, if these clueless individuals in ZANU wanted to help their citizens, they would channel funds to health care, education and other vital social services so desperately needed in the country.

My immediate advice to any enterprising Zimbabwean where the new bond coins are concerned is… assemble them as sets and offer them for sale on any number of on-line auction sites and make a little money for yourself – it may be the only light of day or use that these coins will realise.