Opposition MDC leader Morgan Tsvangirai has accused President Robert Mugabe’s administration of seeking to pay off its local debt using bond notes.

This comes as $245 million issued in treasury bills in the first quarter to finance the budget and pay domestic debt was facing hurdles. A total of $679 million is needed to pay government domestic loans this year alone.

The country faces a huge debt burden. Its total external debt is estimated at $10,7 billion, or 113,5 percent of GDP, at the end of 2011. More than half of it is in arrears.

“Zimbabweans will resist the bond notes and if they are not acceptable locally, what about to foreigners? It doesn’t work, there is no economy that can be run on bond notes.”

“With what Zimbabweans experienced during the era of bearer cheques, they will naturally resist them… They know what they want, a new direction for the country and an economy that is viable and they know that what Mugabe’s government is availing as a solution is short term and will not make them live their aspirations. Zanu-PF, busy fighting for power, is not focusing on the real issues…”

This comes as the Confederation of Zimbabwe Industries (CZI) recently said Zimbabweans must embrace the proposed bond notes, saying they will boost internal trade and ease the cash crunch threatening Zimbabwe’s already lethargic economy.

Rejecting claims by the central bank governor that the new bank notes were merely meant to encourage exports; Tsvangirai said that Mugabe’s government would “abuse” civil servants by paying them in the new form of cash.

“All patriotic Zimbabweans must reject this,” Tsvangirai said. “These bond notes are an attempt to rig the economy.”

Former Finance minister Tendai Biti has warned that the bond notes will have cataleptic consequences to the remaining constructs of Zimbabwe’s pseudo economy.

“It is a decision that will see many of the remaining companies reach breaking point and simply shut down. Few are prepared to relive the nightmare of the meltdown period of 2007 and 2008.

“The move will also engineer a fresh wave of externalisation, under banking, tax avoidance and evasion,” the opposition PDP leader said.
Source: dailynews