Chiwenga misleads nation on origins of bond notes
VICE-PRESIDENT Constantino Chiwenga left the nation in a state of disbelief a few days ago as he brazenly misled people, rewriting Zimbabwe’s well-documented monetary history, claiming the now abandoned bond note was a Rhodesian currency initiative.
BRENNA MATENDERE
Officially opening the International Business Conference at the just-ended Zimbabwe International Trade Fair in Bulawayo on Thursday, Chiwenga said: “The ZiG is expected to provide a lasting solution to hindering inflation expectations which is critical for sustained price and exchange rate stability in the economy. Given these boundless benefits, I therefore call on the public, the private sectors who are in the majority here, including the households, labour and businesses, civic society and the international community to fully embrace and support the Zimbabwe Gold currency.”
Chiwenga added: “We have done away with the bond which we had inherited from the time of Rhodesia. After declaring UDI, they were given sanctions by the United Nations Security Council. That’s why they came with the bond. The bond did not come with Zimbabwe. It came with Rhodesia. It was Rhodesia bond that you used to see. So the bond is away we now have our Zimbabwe currency. Support it.”
Checks on Zimbabwe’s well-documented monetary history show this is clearly untrue and misleading. Rhodesia did not have bond notes, but pounds and then dollars. There was no currency called bond notes between 1965 and 1980 in Rhodesia. Or at any given time prior to that for that matter. Bond notes were first introduced in Zimbabwe in May 2016 by the Reserve Bank of Zimbabwe and they died on 5 April 2024.
The Zimbabwe dollar was introduced in 1980 and it was abandoned in 2009 in the aftermath of the economic meltdown and hyperinflation.
There have been six variations of the local currency which were buffeted by exchange rate volatility and runaway inflation, exacerbated by a protracted economic crisis and macro-economic instability.
The local unit was then demonitised in 2015. The Zimdollar was later revived in 2019 after 10 years, but collapsed earlier this month when the new currency, ZiG, was introduced on 8 April 2024, marking its end.
ZiG will run in a multi-currency system which has been legislated until 2030. The currency of Rhodesia after the Unilateral Declaration of Independence on 11 November 1965 by Prime Minister Ian Smith was the Rhodesian pound.
The Rhodesian pound was sub-divided into 20 shillings (100 cents). A shilling was equal to 12 pence. And a pound was therefore 240 pence.
On 17 February 1970, the Reserve Bank of Rhodesia introduced new bank notes in denominations of 1, 2 and 10 dollars, less than a month before the declaration of a republic on 2 March 1970 after a major diplomatic fallout with Britain over majority rule in the British colony that was reeling from a fiercely raging civil war, or liberation struggle for blacks dominated by white colonial settlers since 1890. And 5-dollar notes were added into the market in 1972.
The Rhodesia dollar replaced the Rhodesian pound at a rate of 2 dollars to 1 pound (1RP: R$2). The dollar proved to be a strong and resilient currency, as it traded at parity with the pound sterling.
However, between 1970 and 1980 the Rhodesian dollar was not a fully convertible currency, although it was used in South Africa, Botswana, Mozambique, Namibia and other countries. Its exchange rate was therefore not a reflection of Rhodesia’s underlying macro-economic fundamentals.
The Reserve Bank of Rhodesia replaced the Bank of Rhodesia and Nyasaland on 1 June 1965 and made the pound divisible into 20 shillings or 100 cents.
In 1980, when conversion was done the Zimbabwe dollar was valued at 1.47 United States dollars, which means it was stronger as it was at par with the British pound sterling.
Zimbabwe’s brief monetary history: – British currency, 1888-1940; – South African currency, 1920-1940; – Southern Rhodesia currency, 1940-1956; – Rhodesia and Nyasaland currency, 1956-1964; – Rhodesian Pound = (Rhodesia and Nyasaland pound) = 20 shillings = 240 Pence, 1964-1970; – Rhodesia dollar = (0.50 Rhodesia pound) 100 cents, 1970-1980; and – Zimbabwe dollar = (100 cents), 1980 = 1 pound or US$1.47.
