By Bernard Bwoni
A
pronouncement about the introduction of anything that the public associate with
having any resemblance to the domestic currency in Zimbabwe is understandably a
painful and anxiety-provoking process. The concern stems from events from that
period before 2009 when things spiralled out of control with hyperinflation and
shortages. The proposal by the RBZ to introduce new bond notes into circulation
is a noble idea being overwhelmed by an avoidable mistrust and uncertain that
could easily have been soothed by the availability of adequate and accurate
information.
The bond notes are not the problem, the idea behind is proper and
will potentially attend to some of the difficulties relating to cash shortages
affecting the country. It is positive
that there are discussions (although mostly panicky reactions which some are
referring to as a public backlash) on the proposal to introduce the bond notes.
This negative public reaction is a simple case of fear, lack of trust and
confidence, and this points to a lack of information.
The pronouncement of the
proposal is coming at a time when the country is facing serious cash shortages
and a number of other economic hardships. There is very limited cash in banks,
there is severely reduced forex inflows owing to reduced exports and
unrestricted imports into the country. The persistent banking crises point to
an unstable demand and supply of money in the financial system; and a
multi-currency system that is impacting on the capacity of the Reserve Bank of
Zimbabwe to conduct monetary policy. The announcement is coming at a time of
crisis and is in response to a crisis.
In time of crises, public reassurances
through education and information is very important to lessen fears and doubts.
Transparency and immediacy are two crucial elements of this strategy to manage
the public reactions. In this day of the internet, crisis situations are often
framed by social media and media coverage, which means that reporters (and the
public on social media) are typically the first audience considered. The
advantages of the internet are many and one of them is the capacity to
communicate in direct ways with intended audience. The information campaign should start there.
The pronouncement by the RBZ Governor has brought about mixed reactions from the public, at home and abroad. Ideally it would have been helpful to take the critical first steps required for such a major announcement to reassure the public, to ensure that the bond notes were going to be perceived as stable by all stakeholders from the public, business and regional and international parties.
It is unhelpful that social media and other media sources are awash
with mixed interpretations of the proposal. There are headlines calling the
move a ‘reintroduction of the Zimbabwe dollar by stealth’. There are alarmist
headlines that these are similar to the ‘Bearer Cheques’ and some saying that
the country was heading back to the period of hyperinflation.
The Reserve Bank
could have gone on a charm offensive right from the start to build a bank of
goodwill with the public. There is more value in having online platforms on
social media, newspapers and hotlines to provide information, explanations and
clarifications to the public and to the world. It is still not too late to
coordinate this public awareness and information strategy in collaboration with
representatives from the country’s business sector, financial sector and
members of the general public. It good to note that CZI has been forthcoming
with encouraging the public to embrace the proposed bond notes as they will
boost internal trade and help ease the cash shortage currently affecting the
country.
The panic
or what is being termed public backlash is being influenced by a lack of the
accurate information or the information not being instantly available. The
information campaign is about confidence in the proposed notes and instilling
confidence in the public. Clarity and consistency will put to rest the public’s
fear and mistrust and help build confidence. Armed with the right information
or having easy access to the right information, public reactions are likely to
be less dramatic.
The public education and information campaign should ideally
have started on the pronouncement day or even earlier. Terms and meanings
needed to be defined and clarified instantly. The introduction is a key and
critical national process and information and education make for easier public
uptake. There could be leaflets and/or adverts explaining what the bond notes
are, their value and what guarantees their value and how they are going to
operate alongside the currencies already in use in the country.
There should
also be clear explanatory notes in a very plain and easy to understand format.
There should be a central platform to ask questions and get information. There
should be a hotline set up to answer niggling queries that continue to
circulate unanswered on the streets, on social media and in local and
international media sources.
The public is currently relying on very limited,
uncoordinated and mostly not very accurate information. Inaccurate information
in the sense that news headlines at home and abroad are screaming of the return
of the Zimbabwe dollar when in fact that is not true. In critical times like
these, the public requires correct and consistent information and
reassurances. The many different and
disjointed versions of the pronouncement that are doing rounds everywhere will
only increase the panic and uncertainty.
The RBZ
Governor Dr Mangudya admitted that the policy pronouncement could have been
communicated better and rightly so. During a press conference in Harare on
Friday 6th May 2016, the Governor did answer some questions and
provided some clarification with authority. He described the proposal as a
‘$200 million economic stimulus to stimulate local production and exports’. He
also pointed out that the move to split export proceeds in US dollar, SA rand
and euros was meant to remove concentration risk caused by consumer
overreliance on US dollar over other currencies in circulation in the
multicurrency system.
He did well to ease some of the public fears and
anxieties, but that has not stopped the social media frenzy that is being
stimulated by misconceptions arising from lack of accurate information and the
right education campaign. The public information and education campaign needs
to be broken to bare basics for easy of understanding, needs to be easily and
readily available so that people are not accessing made-up sensational online
information. It needs to be visible, like a simple Facebook page managed by RBZ
giving precise and accurate information instantly. It could even be a telephone
hotline, a Twitter account or even a WhatsApp forum of some sort. It needs to
be creative to be able to manage people’s expectations and anxieties to avoid
breakdown in communication.
The
questions that are posed by people on social media or on the street are genuine
questions. These are questions about how such an introduction of the notes is
going to affect their lives. They are not trivial questions at all and with a
good education and information strategy these can be effectively managed and to
some degree help reduce the distress and alarm that is being created by the
pronouncement.
Some of
the frequently being asked questions:
Where else in the world has this been done and has
it been successful?
- Are bond notes a currency or not?
- How did the RBZ determine the value of the bond notes?
- If these bond notes are backed by a US$200 million facility from AfreximBank, why not just inject the actual US$200 million into the system?
- What happens when the US$200 million is finished?
- Why not back the notes with a Gold Trust?
- Will the bond notes be redeemable at the bank?
- What happens if we all want to redeem our US dollars?
- What happens if I want to travel outside to go and buy things for resale in Zimbabwe? Can I take the bond notes outside or do I need to exchange them?
- Will I have the option to request to receive US dollars when I want withdraw money?
- What measures are in place to counter the emergency of the dreaded black market?
- Is the US$200 million free? If not, then we are adding more onto our huge debt then?
- What guarantee is there that only US$200 million worth of bond coins will be injected into the system?
- If the US$200 million bond injection constitutes to less than 3% of the money that will be injected, how is this going to ease the cash problems? Where is the other 97% going to come from?
- What happens if someone accidentally prints more than the initial US$200 million of the bond notes?
The
information that the public currently have or is accessing from social media or
the street is mixed and there are also varying interpretations of the above
questions. To some the above questions might seem like minor questions but to
many that is what is causing the anxiety and panic. These are some of the many
questions that are being asked and the outcome is that of the public engaging
with and exchanging disjointed and at times inaccurate information. This is
where that public education and awareness campaign should take shape. That
central platform, that one-stop shop for information and clarification of the
proposal to introduce bond notes. Some of the questions have been addressed
better than others. Some of the answers and explanations will need to be broken
even further to the barest of basics for clarity sake.
The
introduction of the bond notes as Dr Mangudya said, the public “should trust
that we also know what we are doing, and that we believe that Zimbabwe needs to
transform and that this economy needs stimulation, export and production, so
where there is no production, the economy will not do well, so we want to
ensure that there is production”. Dr Mangudya has been responding to some of
the public questions with clarity and this education and awareness campaign
needs to be cascaded down into laymen terms. This is the idea behind an
information and awareness strategy to reduce the negative publicity that such a
noble proposal is receiving.
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Cde Bernard Bwoni is the Vice Secretary for Admin for ZANU PF UK. He writes in his own capacity.
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