However, government has repeatedly said it cannot afford to pay them in foreign currency. At the recent Zanu PF 17th annual people’s conference the ruling party said it would work towards introducing a local currency if the economy improved.
It also made a resolution that government should enact laws that would effectively stop businesses from having a three-tier pricing system.
But business people argue otherwise. Simbisa Brands, a fast food giant, has led the way with what it charges in US dollars being different from the bond price. This is in contrast to the government’s argument that the bond note is equivalent to the US dollar.
Stevenson Dhlamini, an economics lecturer at the University of Science and Technology, sees signs of re-dollarisation on the horizon.
“Everyone is already moving towards transacting in foreign currency. It will get to a point where the bond note will have a free fall eventually. Right now things like fuel which is heavily subsidised by government are sold in bond notes but there are some garages that now charge strictly in foreign currency. If you look closely they are the ones with fuel most of the time and that means back to strictly foreign currency is the way to go, but let the markets take shape on their own,” he said.
Government’s stance that the bond note is equivalent to the US dollar has started showing adverse effects. Ratings agency Standard & Poor’s (S&P) has just downgraded Zimbabwe to junk status.
“Due to the worsening situation in the country regarding foreign currency shortages and inflation concerns, S&P DJI will remove index constituents domiciled in Zimbabwe,” said the organisation in a statement.
The S&P African Index is used by investors as a benchmark for the African market. It covers companies listed in 13 African countries and tracks the stock market prices of those companies. Zimbabwean companies will now be excluded from that index.