The recent announcement by one of country’s stock market leaders, Delta Beverages, that it will be selling its products in United States dollars starting tomorrow should be a wake-up call to government to realise that the surrogate currency, bond note, has completely lost its lustre.
It is sad that authorities have chosen to bury their heads in the sand, pretending the bond note is trading at par with the US dollar, ignoring all the fundamentals and glaring facts on the ground that suggest otherwise.
Delta has joined fellow listed company, Simbisa Brands, which last month openly started trading in hard curreny.
Other informal businesses have been benchmarking their products in US dollar and it is beyond an iota of doubt that we are going to see a wholesome switch to this new phenomenon.
Government is fooling no one by insisting that the bond, real time gross settlement (RTGS) and US$ exchange rates are at par and yet its tax agency, the Zimbabwe Revenue Authority, is now actively levying import duty on vehicles and other items, including meat and cosmetics, in hard currency.
Other goods listed in the 2019 budget for duty in forex include fresh cheese (grated or powdered of all kinds), fresh grapes, groundnuts, margarine, selected meat products, poultry products, preserved fish and salt water.
With all due respect, government must review its interpretation of the 1:1 exchange rate in the coming Monetary Policy Statement expected at the end of this month.
While the economy is increasingly re-dollarising itself, it is difficult to conceive how ordinary Zimbabweans, whose earnings are still denominated in the bond note, will manage to pay for services and products charged in foreign currency.
Already, civil servants have raised the ante, calling on their employer to pay them in hard currency or have their RTGS salaries benchmarked at the existing exchange rate after realising that inflation was fast eroding their earnings.
It’s undeniable that the bond note is on its way out, the same way as the Zimbabwe dollar, which was decommissioned in 2009 after hyper-inflation had reduced it to a mere piece of paper.
Acting President Constantino Chiwenga has rebuffed striking doctors’ request to be paid in US dollars, saying government does not print US dollars and would, therefore, not consider their demands.
It is yet to be seen on how government will navigate this terrain, given that business has now taken the lead in dollarising.