The government of Zimbabwe is headed for a showdown with disgruntled civil servants following revelations that they will be paid in bond notes. Civil servants are already up in arms against government over delays in receiving their salaries.
Zimbabwe’s central bank chief has admitted that people will be paid partly in bond notes, despite earlier claims the notes were to be an incentive for exporters.
“If you are getting a $400 salary, you will still get $400 in United States dollars, bond notes, rand or euros. If you don’t want them then you use plastic money,” central bank chief John Mangudya said in quotes carried by the official Herald daily.
The bond notes are likely to be introduced around October. They are supposed to be at 1:1 parity with the US dollar.
Mangudya’s announcement in May that bond notes were to be introduced followed months of cash shortages.
His claim that they would be backed by a $200m loan form the African Export-Import Bank has not reassured Zimbabweans who fear a return to the overprinting of the pre-2008 hyper-inflation era.
An opposition Movement for Democratic Change (MDC) official told News24 earlier this week that the authorities could be stacking up as much as $2.5bn in bond notes, but that figure will be hotly contested by the central bank.