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.
Twitter: @bernardbwoni
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