The Sunday News
Gabriel Masvora
TOWARDS the end of the last year, the Reserve Bank of Zimbabwe introduced the use of bond coins to deal with the shortage of smaller denominations of the dollar after the American currency had elbowed other currencies to become the preferred mode of exchange although on paper the country uses multi-currencies.The adoption of the bond coins was also an admission that the United States dollar has become the official currency in the country, relegating other currencies to bit part roles while in some corners of the country completely out of recognition.
This was seen as the ultimate move to solve the change puzzle in Zimbabwe but it has also emerged that some people and retailers are still not keen to use bond coins.
It could be one of those problems associated with the introduction of new products but somehow you can feel that enough was not done to ensure that the bond coins would be received as a relief not as a suspicious medium of exchange. That is why authorities must ask themselves why some people are resisting the coins.
The biggest problem the country has been facing is the issue of smaller US denominations.
While the country was awash with paper dollar denominations, there were no coins, forcing retailers to either round prices to the nearest dollar or give out other products such as sweets as change.
This was a big problem in many cities. At one time the country imported rand coins from South Africa but they were not keenly accepted in many areas forcing authorities to return them.
However, as the country was gripped in the chaos on how to deal with the issue of change, Bulawayo and most areas in the southern parts of the country had embraced the rand especially the lower denominations.
While other cities were facing the shortage of change, Bulawayo somehow managed to embrace rand coins and started transacting them as change even for US dollar purchases.
Since 2009, when the country introduced the foreign currency, Bulawayo, somehow had always preferred to transact its goods with a bias towards the rand.
This even created a headache in the early days because while other areas tended to treat the rand lightly, Bulawayo and its surroundings were putting great value, religiously following prevailing exchange rates whenever there are transactions involving the rand and other currencies.
At one time, there was a huge outcry from residents of the city calling on companies and even the Government to pay workers in the city using the rand.
This was at a time when the rand was officially trading at below eight rand per dollar. While this was the official exchange rate, other cities had imposed a1:10 blanket rate which was seen as convenient.
Even today when the rand has fallen to the dollar to around 1:12 some Government transactions like toll gate fees are still paid using the so-called convenient rate.
As time went on, the cries from Bulawayo for salaries to be paid in rand faded as the dollar power gained momentum.
The cries were further extinguished as the city’s populace simply discovered that they had to embrace the dollar.
However, this never took away the rand influence, forcing retailers and the general populace to use the dollar of course, but still religiously follow the existing exchange rates to fill in the gaps with the rand.
The city became awash with rand coins. Of course the exchange rate was not followed to the last coma, but most transactions were always closer to the day’s exchange rate.
Retail shops even showed daily exchange rates and some calibrated their machines to ensure easy conversion of dollar to rand especially on change.
Internationally the dollar also started gaining value against the rand, and the cries of feeling the unfairness of proper exchange rates were forgotten in Bulawayo. While other cities were still stuck with the convenient 1:10 rate, the Bulawayo community somehow started to benefit although marginally.
Local transport fees were stuck at R5 and at one time the dollar was enough to cover two local trips and you could still get R2 as change.
Of course some retailers exploited this, migrating from pegging prices in rand to dollar but one issue which never remained in doubt was that no matter what, you could still get your change even to the nearest South Africa 50 cent.
Very few transactions in the city even in major retail shops saw customers being given sweets or biscuits as change in the city.
Such a scenario should have warned the central bank to come up with a clever and human centred way of introducing the bond coins especially in Bulawayo.
To many people and business in the city, change was never an issue hence the skepticism in accepting the bond coins.
The central bank has also not done enough to educate the people about the coins. With the advent of social media, some people have hijacked the issue and spread news that this was a ploy to re-introduce the local dollar although this is far from the truth, according to officials.
But the central bank must know better that the agony people went through when the local currency was still in circulation is still very fresh in all those who experienced it and any mention of the local currency certainly evokes the sad memories.
That is why this must have been done in a calculated manner to ensure the general public easily accept the coins.
In Ecuador, another country which dollarised in 2009, and introduced its own coins to use along with the dollar, authorities initially imported a certain portion of real American coins to circulate along with its Centavo coins although they carried the same value.
This was some sort of integration period. This, unlike here where the coins were just thrown into the market, accorded the Ecuadorians to quickly change their coins with the US coins whenever they felt they did not need the local coins.
Here if you get the coins and then face a problem of some retailers or individuals who resist them, you have to wait until the coins accumulate to a dollar so you can get into a bank and exchange for a real dollar. This is cumbersome and will surely make you not accept the bond coin on your next transaction.
This is even tricky in Bulawayo where like I said before, there is already a competing and readily acceptable rand which anyone, anytime would prefer to the bond coin.
That is why the issue of bond coins in Bulawayo will be very tricky but I hope as other cities accept the use of the coins, the city, like in the past will slowly accept them too for the benefit of the nation.
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