By Sebastian Mhofu

Zimbabwe’s central bank won’t say exactly when its controversial new bond notes will go into circulation this month, but the prospect has left many Zimbabweans worried. A protest is planned for later this week.

Zimbabwe’s radio and television stations have been flooded with Reserve Bank of Zimbabwe’s jingles promoting the bond notes saying they would be introduced any time this month. The central bank says the bond notes will trade on par with the U.S. dollar and that they will ease the severe cash shortages Zimbabwe has been facing for close to a year now.

Not to be outdone, some Zimbabweans have started circulating on social media jingles denouncing the proposed bond notes. That jingle says bond notes are the chemical agent that will finally destroy Zimbabwe’s ailing economy. Linda Maupa says she will take part in a protest planned for Friday by the opposition and civic organizations against the controversial new bond notes.

“I think it is a way of stealing from us. Daylight robbery like what they did in 2007, 2008,” Maupa said. “I feel we are being robbed. They are taking our U.S. dollars that are valuable and replacing them with bond notes that are just paper, printed paper. And we are not going to find goods in stores. The money cannot buy because it is not foreign currency. They need foreign currency to purchase things from outside the country. And if we have bond paper we are going to starve like we did in 2008.

Zimbabwe abandoned its own worthless currency in February, 2009 amid hyperinflation. Since then, it has been using all major foreign currencies but mostly the U.S. dollar.

Over the weekend, Zimbabwe Vice President Emmerson Mnangagwa said the government would go ahead with introducing bond notes despite threats of protests. He said bond notes are meant to slow down the smuggling of foreign currency out of Zimbabwe.

“The U.S. dollar is for international transactions. That is only found in Zimbabwe, a unique country, which is abusing the dollar,” Mnangagwa said. “So we said we must make sure that we use the U.S. dollar for the purpose we designed it. So we needed to find a mode of transaction that is domestic because if you put $200 million into Zimbabwe today, after a few days it’s all gone. It is not even going through the banking system.”

Zimbabwe has struggled to pay civil servants over the past year as revenue from taxes and duties has fallen. Analysts have long urged President Robert Mugabe’s government to attract foreign investors and promote exports to ease the cash shortages in Zimbabwe.

So far that advice seems to be falling on deaf ears and the country continues to import most food including bottled water, sweets, and toothpicks. As part of measures to curb that, the governor of the Reserve Bank of Zimbabwe, John Mangudya, has introduced what he calls a “priority list” on what has to be approved to be imported.

Despite intimidation and death threats, the SABC 8 on Sunday reiterated their determination to go ahead with a Constitutional Court case probing possible censorship at the national broadcaster.

“While the journalists are concerned about their safety, they remain resolute and determined to persist with the case,” said their lawyer, Aslam Moosajee.

Moosajee has previously been sent text messages containing death threats against certain of the journalists if they do not drop an upcoming Constitutional Court case asking for measures to protect the national broadcaster’s newsroom against censorship or interference.

One of the texts sent to Moosajee targets radio producer Suna Venter, declaring, “We will double what sbc8 backers are paying advice them to drop the case friday or the girl dies call this nr to stop it [sic].”

On Sunday, Moosajee, who is acting pro bono in representing the journalists, retorted that no amount of money could “lure” him to drop the case.

“I believe in their cause,” he said.

The SABC came in for criticism in July when it fired Venter, Foeta Krige, Krivani Pillay, Thandeka Gqubule, Busisiwe Ntuli, Lukhanyo Calata, Vuyo Mvoko and Jacques Steenkamp for speaking out against the broadcaster’s policy to not show footage of violent protests.

Subsequently the eight journalists, who were rehired by the SABC in September following a lengthy Labour Court battle, filed papers at the Constitutional Court asking for the National Assembly to institute an inquiry into the various issues plaguing the broadcaster, including their firings.

Intimidation

This weekend, the Sunday Times reported on various incidents of intimidation and death threats – especially targeting Venter, but also affecting certain others.

The Democratic Alliance has since said it will ask Acting National Police Commissioner, Khomotso Phahlane to give the journalists police protection until the court case is finalised.

Detailing the incidents on Sunday, radio producer Foeta Krige confirmed that his caretaker was held up during a house robbery.

According to the Sunday Times, TV producer Busisiwe Ntuli’s home has also been broken into and someone tried to ram into her car while she was in it. Ntuli declined to comment to News24.

Speaking to News24, Venter, who remains in hiding, confirmed the incidents reported by the Sunday newspaper. Acts of intimidation began with threatening messages sent in August and a break-in in her house in September. However, since October, the number of incidents has increased significantly.

These include being shot at with ceramic bullets while driving home at night, following which a text message was sent saying, “Next time, won’t miss”. In another incident, electric wires on her brakes were cut. She has also been the victim of tyre blowouts and punctured tyres.

Most recently, this Saturday, her car – parked at her secret location – was broken into and goods disturbed, but nothing was taken.

Nevertheless, Venter reiterated that she would not drop out of the court case.

“When [the incidents of intimidation] happen, you are scared for that moment – but if you look at the overall picture, I have to tell myself I will not allow them to terrorise me. And I will not.”

Won’t back down

Krige echoed Venter’s sentiments.

“We will never back down.”

He said all the journalists wanted was for the newsroom at the SABC not be subjected to interference.

A police task team has been established, headed by Lieutenant Colonel Gert Grobler.

Gauteng police spokesperson Lungelo Dlamini confirmed the investigation was ongoing.

“No one has been arrested,” he said.

Venter said that those behind the intimidation seemed “quite sophisticated” in their tactics.

She said, for example, that the shots angled at her windscreen during one incident were accurately aimed, appearing to have been fired by someone well-trained. She said she was saved because the shooter was too far away and she had protective film over her windows.

Krige also said that the case was made complicated by the fact that those involved clearly has certain professional skills such as being able to intercept emails.

The Sunday Times cited unnamed sources as saying the text messages had been identified as coming from the cellphone tower nearest the SABC headquarters in Auckland Park.

Krige suggest one way to determine who was behind the attacks would be to question who might feel the Constitutional Case was detrimental to their interests.

“I question their motives… why be frightened by newsrooms being independent?”

DOCUMENT

On Wednesday 2 November 2016, a report entitled ‘State of Capture’ prepared by the former Public Protector, Advocate Thuli Madonsela, was released.

The report did not make any findings. Instead it made what were termed “observations”, based, (the report acknowledged), on an investigation not completed. It deferred a proper investigation to a commission of inquiry to be established at a future date. The outgoing Public Protector has directed the President – in whom the Constitution vests the power to appoint commissions of inquiry – to appoint one, and further directed the Chief Justice to designate a particular judge to head it.

It is a matter for regret that the report was prepared in haste to meet a deadline related to the Public Protector’s own departure from office. That her office continues, as all State offices do, and that any uncompleted function is completed by a successor in that office, was not a consideration in the report.

“Observations” made in the report relating to, inter alia, my conduct, are in material respects inaccurate, based on part-facts or simply unfounded. What the previous Public Protector has done is not herself to investigate to completion, or to allow her office to complete what she initiated too late to complete herself. She has also determined on recording “observations” without, in crucial respects, putting intended harmful disclosures to me first – as she was by law required to do. She has effectively deferred my constitutional right to be heard to a future date, and to a further body, which she has ordered others to assemble.

If such a body is indeed by law to be assembled, and carry out the task, it will not be for some time -as recent experience indicates.

In the meanwhile harm is done – to the institution it has been my honour to lead in the most difficult times, to its reputation and to my own. I say nothing of the harm, too, to others close to me.

I am confident that, when the time comes, I will be able to show that I have done nothing wrong and that my name will be cleared. I shall dedicate myself to showing that an injustice has been done by the precipitate delivery of ‘observations’, following an incomplete investigation, which the former Public Protector has drawn back from calling ‘findings’. The truth will out.

I have, in the interests of good corporate governance, decided to leave my employ at Eskom from 1 January 2017. I do so voluntarily: indeed, I wish to pay tribute to the unfailing support I have had since I took up office from the chairman, the Board and with those with whom it has been my privilege to work. Together we brought Eskom back from the brink.

I will take time off to reflect before I decide on my next career move.

I wish to reiterate that this act is not an admission of wrongdoing on my part. It is rather what I feel to be the correct thing to do in the interests of the company and good corporate governance.

I wish to thank the shareholder representative, Ms Lynn Brown, the board, the executive team and all Eskom employees for their hard work and guidance in steering the company out of very difficult times during the twenty months that I was privileged to be the Group Chief Executive.

I go now, because it is in the interests of Eskom and the public it serves, that I do so.

By Bassey Udo

The Nigerian government on Thursday extended invitation to Russians to take advantage of the country’s arable land to produce and export agricultural products.

Vice President Yemi Osinbajo gave the invitation when a Russian delegation led by the Russian Minister of Agriculture, Alexander Tkachev, called on him on Thursday.

“The oil prices have gone down tremendously and yet large amount of foreign exchange is used to purchase food abroad and we have large arable land for agric. It won’t make sense, if you don’t use the land,” Mr. Osinbajo said.

“We are inviting Russian farmers to invest in Nigeria, produce and import from here. We are just six hours away from Europe by air. Vegetables, flour can be exported to Europe from here. Even our local market here is a lot.”

Mr. Osinbajo said the availability of arable land in Nigeria made the case for improved local agricultural production in Nigeria an imperative, rather than continued importation with its significant pressure on dwindling foreign earnings of the country.

Both the vice president and the delegation that included Russian deputy minister of agriculture, Evgeny Gromyko, and officials of Russian firm (Rusal) agreed that the two countries should deepen the existing diplomatic relationship, especially economically.

The vice president assured his visitors, which included the Russian ambassador in Nigeria, Nikolay Udovichenko, there was a lot of money to be made if Russian technology in agriculture was deployed locally.

Earlier, the Russian agriculture minister, who is the Co-Chair of the Nigeria-Russia Joint Commission, expressed his country’s willingness to enhance the existing trade relations with Nigeria.

He noted that the Nigeria-Russia trade volume as at the end of 2015 exceeded $300 million, adding that there were potentials for improvement in the years ahead.

The Russian minister said there were better opportunities for economic cooperation between both countries.

Maputo — The International Monetary Fund (IMF) on Tuesday welcomed the recent decision by the Bank of Mozambique to hike interest rates in order to slow down the growth in the rate of inflation.

Speaking in Maputo, where he presented an IMF report on recent economic developments in su-Saharan Africa, the Fund’s representative in Mozambique, Ari Aisen, described the central bank’s measures as “courageous”.

The Bank of Mozambique’s Monetary Policy Committee announced on 21 October an immediate increase in the Standing Lending Facility (the interest rate paid by the commercial banks to the central bank for money borrowed on the Interbank Money Market) by 600 base points, from 17.25 to 23.25 per cent. The Standing Deposit Facility (the rate paid by the central bank to the commercial banks on money they deposit with it) also rose by 600 base points from 10.25 to 16.25 per cent.

The Compulsory Reserves Coefficient – the amount of money that the commercial banks must deposit with the Bank of Mozambique – which had been divided into two, for local and for foreign currency, has now been reunited, and stands at 15.5 per cent for all currencies, For deposits in local currency, the metical, that is an increase of 250 base points, while for deposits in foreign currency the increase is only 59 base points.

Aisen said these measures were correct to control inflation. “There’s an effort on the fiscal side”, he said. “On the monetary front, there’s been an increase in the compulsory reserves” – and such measures were key “to mop up excess liquidity”.

“The central bank understood that monetary policy needed to take a stance that confronted the rise in inflation”, he added. “I think the Bank of Mozambique recognized that it had to take measures to deal with inflation”.

Aisen’s only criticism was that the measures had come rather late, and so were tougher than would have been the case had the bank acted in good time. (The delay, however was almost certainly due to the appointment of a new governor, Rogerio Zandamela, a former IMF official. There was a hiatus of three months between the last meeting of the Monetary Policy Committee chaired by the then governor, Ernesto Gove, and the first meeting chaired by Zandamela).

Aisen added that the solution to the current economic crisis involves the implementation of structural reforms, improvements in the planning of public investment, strengthening the capacity to analyse fiscal risk, and prudent management of the public debt.

Meanwhile, some of Mozambique’s creditors have formed a “creditors’ committee”, after taking alarm at last month’s warning by the Minister of Economy and Finance, Adriano Maleiane, that the country’s current debts are unsustainable and must be restructured.

The “creditors’ committee”, according to a report from the Reuters news agency was formed by 60 per cent of the holders of Mozambique’s 2023 Eurobond.

This is what remains of the bonds for 850 million dollars issued in 2013 by European banks (notably Credit Suisse and the Russian bank VTB) on behalf of the Mozambique Tuna Company (EMATUM).

This debt has already been restructured once. In early April, the government on Tuesday ratified the deal under which the securities issued by EMATUM were replaced by sovereign government bonds with a longer repayment time, but at a higher interest rate. This was only possible after the great majority of the bondholders – 81.5 per cent – had agreed to the swap.

The proposal accepted by the bondholders was that the EMATUM bonds (now down to 697 million dollars, after the first repayments) would be swapped for government bonds for 585.5 million dollars that mature in 2023. The interest rate, however, shoots up to 10.5 per cent. (The initial rate had been LIBOR (London Inter-Bank Offered Rate) plus 6.5 per cent).

For the government, the advantage was that it would not have to repay the capital until 2023. Until then it will only be obliged to make annual interest payments. The government’s assumption was that by 2023 revenue will be flowing in from the vast natural gas fields in the Rovuma Basin, off the coast of the northern province of Cabo Delgado.

The deal gave the government an extra two years to repay, and the yearly burden on the treasury fell from 200 million dollars to about 76 million.

But this deal was reached before the full scale of Mozambique’s indebtedness became clear, and before it was common knowledge that Credit Suisse and VTB had, with Mozambican government guarantees, lent a further 1.1 billion dollars to two more quasi-public companies, Proindicus and MAM (Mozambique Asset Management).

Ematum, Proindicus and MAM pushed Mozambique’s debt over the threshold of sustainability. When, on 25 October, Maleiane presented the true situation to a meeting of creditors in London, he admitted that it was impossible to repay the debt on the current servicing programme.

The figures in the government’s document showed that debt service, including arrears, is 675.2 million dollars this year, rising to 803.8 million dollars in 2017, 826.8 million in 2018 and 865.5 million in 2019. From 2017 to 2019, easily the largest slice of the debt service goes on the EMATUM, Proindicus and MAM loans – this will be 591.2 million dollars in 2017, 377.3 million in 2018, and 359.8 million in 2019.

The government is thus looking for an agreement with creditors that will bridge the gap between now and 2021, when the revenues from the Rovuma gas fields should be flowing. It wanted to reach agreement with the creditors “on terms compatible with IMF debt sustainability criteria as soon as possible”. It suggested an agreement in principle with creditors on a “debt resolution proposal” by December, and in January the agreed debt resolution strategy would be implemented.

The Ematum bondholders were taken by surprise. In their statement on setting up the creditors’ committee they said that other commercial and multilateral lenders ought to be first in line to provide debt relief.

“The formation of the GGMB (Global Group of Mozambique Bondholders) was triggered by Mozambique’s surprise announcement on October 25, 2016 that it intends to seek a restructuring of the entirety of its external commercial debt, including the 2023 bonds that creditors agreed to restructure only six months ago,” their statement said.

They have no intention of negotiating now, and demanded that negotiations with the government should only begin once an independent debt audit had been completed and published.

This refers to the audit of Ematum, Proindicus and MAM that will be undertaken by the company Kroll, regarded as the top forensic auditing company in the world. Kroll has been given 90 days from signing its contract to deliver the audit.

If the bondholders stick to their current position, negotiations with the government could not start before February, at the earliest.

By Mohammed Momoh

Nigeria has resolved to stop the importation of wheat from Russia to help save its foreign currency reserves.

The decision was announced following the end of the fourth Joint Commission meeting between Russia and Nigeria in Abuja at the weekend.

Nigeria spent $880 million on wheat imports last year and has already spent $660 million in 2016.

Foreign Affairs minister Hajiya Khadija Abba-Ibrahim said Nigeria would instead invite Russians to help them improve their agricultural productivity.

“We import a lot of wheat from Russia and we are telling Russia that this has to stop.

“We want the Russian companies and farmers to come to Nigeria to show us how we can grow our agriculture sector with modern technology,” the minister said.

The Russian delegation was led by the deputy head Russian Delegation in Nigeria, Mr Dianov Alexandar Yurievich.

The value of wheat imported into Nigeria between January and September 2016 was $660m, according to data obtained from the National Bureau of Statistics.

Nigeria, in the first week of November, imported approximately 53 million metric tons valued at $7.8 billion.

Nigeria has stepped up wheat production and has hit 60,000MT, ranking it 61st out of 79 countries in global production.

According to data from the Central Bank of Nigeria, the country spends $11 billion (N3.1tn) annually to import wheat, rice, sugar and fish.

Nigeria’s food import was growing at an unsustainable rate of 11 per cent per annum.

Wheat is in high demand in Nigeria as a raw material for bakery and feed mills.

Meanwhile, members of Nigeria’s Shiite Muslim sect staged peaceful protests today for the second day running to press for the release of their detained spiritual leader, Sheik Ibrahim El-Zakzaky, who has been held since December last year.

They were also protesting against the proscription of the sect by the government.

The founder of Islamic Movement of Nigeria (IMN), an umbrella body of Shiites and some of his followers, has been held in various prisons since the sect’s clash with the military.

The clash in December in Zaria, a university town in Kaduna state, claimed more than 380 members of the sect.

President Muhammadu Buhari, in a national broadcast, accused the Shiites of holding their communities hostage.

Pretoria — Government has sent its condolences to the families of those who were killed in yesterday’s heavy floods.

Six people died due to the flash floods and a three-year-old girl is still missing in Alexandra.

The downpour battered some parts of Gauteng on Wednesday afternoon, leaving a trail of destruction, with many cars being swept away and some homes being flooded.

“Our thoughts are with the families of the victims and those that were injured and affected by the storm. It is sad and unfortunate that a child went missing yesterday during the floods,” Government Communication and Information System (GCIS) Acting Director General Donald Liphoko said.

The police are hard at work searching for the child.

Liphoko said government empathises with those who have lost their properties and belongings during this time.

The Gauteng Provincial Government has activated the disaster management centre to coordinate investigations into the extent of damage caused by the flash floods.

The SA Weather Service has issued an alert for severe thunderstorms in Gauteng today.

Community members are advised to avoid crossing low lying bridges, streams and rivers; and encouraged motorists to exercise caution and avoid driving on flooded areas.

Motorists are advised to pay attention to barricades and to not drive through standing water on roads or in parking lots.

During heavy rains, motorists must be on special alert near dips in the highway and near low-lying bridges. Parents are also advised to keep children away from playing in and near drainage ditches and storm water drains.

In the event of an emergency, residents of Gauteng should call the emergency management services on 10177.

By Bonang Masolotate

Swartkopfontein — The opening of Ngotwane Bridge between South Africa and Botswana is expected to unlock bilateral trade between the two countries.

The Minister of Transport and Communications, Mr Kitso Mokaila, said this on Monday during official opening of the bridge at Swartkopfontein Boarder Post in South Africa.

He said the bridge would speed up movement of goods, people and further promote development within the region.

“The development of the regional transportation infrastructure and expansion of capacities of transportation corridors remain key in the efficient distribution of goods and development in Southern Africa,” he added.

Mr Mokaila said the SADC road network was one of the region’s largest public sector assets.

He said productivity in virtually every sector of the economy was affected by the quality and related performance of the road and said it was therefore essential that the bridge was managed efficiently and effectively.

Mr Mokaila highlighted that the bridge project dated as far back as 2000 when the two counties met to map a way forward on how they could improve the existing river crossing structures between them.

He said the move initiated the bilateral agreement between the two governments in which Botswana was to fully fund the design and construction of Platjan Bridge while South Africa was tasked with the Swartkopfontein/Ramotswa Boarder Bridge.

Furthermore, he said Botswana completed the design of the Platjan Bridge in November 2009 and due to the financial meltdown, the bridge construction was suspended and added that currently funds are available for the project.

“The project is currently at tendering stage and I would like to point out that there were technical difficulties that caused the delay in implementing this project,” he said.

The South Africa Minister of Transport, Ms Dipuo Peters said the bridge which was constructed to a tune of R78.5 million created employment of about 51 jobs for South Africans and Batswana for a period of 23 months.

Ms Peters said the bridge connect the people of the two countries as well as creating new opportunities especially that the people of the two countries are related.

She said trade has grown between the two countries over the years and so is the movement of goods and people. Ms Peters added that the new bridge will ease pressure and de congestion at Zeerust and Pioneer Boarder gates.

During the bridge construction, nine Botswana labourers were engaged while two companies were also engaged while 42 South Africa and five companies were engaged.

Source : BOPA

By Kagondu Njagi

Namanga, Tanzania — Rangelands threatened further as pastoralists struggling to graze animals sell firewood so their families can eat

It is only 6 am but Veronica Lemungat is already setting up shop at the Namanga open-air market, on the Tanzania-Kenya border. She brushes twigs off her striped red and blue dress, and places a bundle of firewood at her feet.

Her back still aches from carrying the 10 kg (22 lb) load on the two-hour journey from Longindo, her village in northern Tanzania.

“I collect the firewood from the bush in the evening and go to the market in the morning because it is not too hot,” she explained.

Prolonged periods of drought in the region have depleted grazing land, forcing pastoralists to travel with their herds for weeks at a time – sometimes months – to look for greener pastures.

With their men gone, pastoralist women like Lemungat must find new ways to boost their income – by collecting and selling firewood, for example.

“Drought dries up rangeland vegetation, making firewood readily available in the bush,” Lemungat told the Thomson Reuters Foundation.

For a 10 kg bundle of firewood, the mother of three makes 4,310 Tanzanian shillings (about $2) each day.

“With this money, I buy maize flour and vegetables to cook for my family,” she said. “It’s better than staying at home like I used to, with only sour milk to survive on during drought.”

KENYA BAN

Although Tanzanian law doesn’t expressly forbid collecting firewood in the wild, the country’s minister for agriculture, livestock and fisheries, Charles John Tizeba, told a conference in Nairobi in September the practice could lead to deforestation and encroachment of protected areas.

Harvesting rangeland vegetation is illegal in Kenya, however, which drives Kenyan traders to cross the border at Namanga, looking for firewood.

“I rely on firewood to make charcoal,” said Thomas Mwanzia, a Kenyan charcoal trader who buys wood at the Namanga market.

“Getting firewood in Kenya is becoming very difficult because the government protects natural resources like forests and rangelands.”

Another looming threat for Lemungat and other traders is Tanzanian youth, who have also identified firewood as a potential income source and trade it riding motorbikes.

“A motorbike can carry five times what I can carry on my back and reach the market faster,” said Lemungat. “The higher number of sellers is bringing firewood prices down in Tanzania.”

Collecting and selling firewood is not what she had hoped for in life.

In 2014, she tried to convince her husband to sell part of the family’s livestock and use the money to invest in a fresh milk business in Namanga. But he refused, saying his animals were more important.

According to Hellen Ntinina, a Maasai community leader in Namanga, “the main occupation among the Maasai is livestock herding – a man who owns livestock is respected by others”.

BRACELETS AND BEES

Dyno Keatinge, chair of the Association of International Research and Development Centers for Agriculture, a food security alliance, acknowledged that practices like collecting firewood may lead to deforestation in East African countries without laws to protect forests and the environment.

But there are other ways for pastoralists to boost their income without depleting rangelands, he added.

“Rather than directly exploiting natural resources, herders should have a good mixture of income-boosting activities to then withstand recurring drought if needed,” he said.

“Maasai women, for instance, are very good at making ornaments like bracelets and necklaces – the government should support that activity by linking the women to markets.”

George Marona, a community elder in Namanga, said non-profit groups like World Neighbors are training communities to set up modern beehives on rangelands, instead of harvesting the vegetation for firewood and charcoal burning.

The beehives have wooden frames where the honey is stored, which can be removed without crushing the bees, he said.

“This prevents people from using fire to scare away bees and harvest honey, as they normally do for traditional beehives, with flames that can lead to dangerous bush fires,” he explained.

($1 = 2,175.0000 Tanzanian shillings)

(Reporting by Kagondu Njagi, editing by Zoe Tabary and Megan Rowling. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, trafficking, property rights and climate change. Visit http://news.trust.org)

Foreigners buyers are deserting the Zimbabwe Stock Exchange in record numbers, with net outflows of US$56,28 million in the 10 months to October, the biggest sell-off in five years over government plans to introduce a token currency in the financial system.

Zimbabwe has sort to contain a cash shortage by introducing bond notes, which it says would trade at par with the US dollar. President Robert Mugabe on Monday used the Presidential Powers (Temporary Measures) Act to amend the Reserve Bank of Zimbabwe Act to designate the bond notes as legal tender, effectively launching the new currency.

But questions remain about the legality of the instrument, which was used to bypass Parliament.

In May, the central bank announced its plans to circulate bond notes alongside the US dollar and other currencies in Zimbabwe’s multi-currency basket, which also includes South Africa’s rand, Botswana’s pula, China’s yuan, the euro, British pound and Japan’s yen.

The central bank says the surrogate currency will be backed by a US$200 million facility provided by the African Export Import bank.

The bank has not said when the notes will be brought into circulation.

Zimbabwe has suffered from a crippling cash shortage since the beginning of the year, and foreign investors appear to be unimpressed by the government’s move to introduce a local currency, eight years after it ditched the hyperinflation ravaged Zimdollar.

The central bank insists that the bond notes are not local currency, but President Mugabe has called them a “surrogate currency”, while vice president Emmerson Mnangagwa last week called them “a mode of transaction that is domestic”.

Foreign participation on the Zimbabwe Stock Exchange recorded a net outflow of US$56,28 million in the 10-month period to October 31 this year, compared to US$306 000 over the same period last year.

In 2012 with Zimbabwe’s post-dollarisation recovery at its zenith a growth of 10,6 percent the ZSE recorded net inflows of US$51,983 million. In 2013 and 2014, it generated net inflows of US$82,962 million and US$93,201 million over the 10 months.

Analysts say government’s poor creditworthiness has also influenced foreign buyers’ investment decisions.

Chinamasa had predicted a budget deficit of US$150 million in the 2016 budget. As of June, this year, the deficit was at US$623 million.

In his mid-term, fiscal policy announced in September, Finance Minister, Patrick Chinamasa noted that: “There is a growing trend whereby international correspondent banks and other financial institutions terminate financial relations with financial institutions in the Eastern and Southern Africa Anti-Money Laundering Group member states, including Zimbabwe.”

The process, commonly referred to as de-risking, has hit hard trade transactions and portfolio investments which largely rely on correspondent banking relationships.