How feasible is the bond note incentive system?

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Definition of incentive is basically something that induces a person to act. People are rational they make decisions by weighing costs and benefits, their decisions may change in response to incentives. The 5% incentive is not as attractive as RBZ makes it to appear, i.e. the moment a company or an individual gets the 5% they would prefer to exchange it right away into US dollars to preserve their purchasing power. A further analysis of this incentive is that its only given after the export has been made and payment has been made. Exporters are concerned with financing purchases and sales at least at working capital level. International trade is costly mainly finance mechanism should entail financing the process thereby facilitating, in this case if exporters are currently being paid after 30 days or 60 days by their customers and they are struggling working capital wise, they will still struggle and will only hope to get the 5% in 30 or 60 days’ time. The incentive system does not change much the predicament of a company for instance if they are struggling to finance purchases, production and sales and they do have a long cash operating cycle. The quantum of exports projected by RBZ does not correspond with the financing mechanism at least considering that there is no much production in Zimbabwe and the industry require capitalisation, not only working capital. Infect the costs of 5% incentive will result in less bank credit available for the very same industries which should have been financed through bank loans for them to be able to produce for the export markets. When they get the 5% either they will need foreign currency to import raw materials or even when they use locally produced raw materials they will still prefer to change them to US dollars to preserve value, creating further demand for US dollars which are already in shortage. What will likely happen with this incentive system is that exporters will adjust with any marginal changes that is going to happen in currency spot markets. Businesses and all individuals will make small incremental adjustments to their plan of action depending with what will happen due to market forces.
The incentive system is just a way of introducing bond currency into the market, the RBZ desperately need money, why are they giving it away. Remittances don't need an inventive, this will not result in an increase of level of cash send to Zimbabwe. Remittances only increase if the income levels of the sender increase and their priorities in Zimbabwe increase as well. If we export $US5-10billion worth of exports yearly and we calculate 5% incentive, and the incentive is issued yearly, the facility cannot be fixed. The maximum amount of exports targeted of US$6 billion amounts to injection of US$300m worth of bond notes every year. The government and RBZ do not have the money, where is the 5% incentive coming from? This is flawed economics. Even if bond notes are well managed, market forces will make impact an exchange rate will emerge. Giving 5% incentives for exporters and remittances of money you don't have infect it is tax payers who are going to pay for this incentive system. The policy will prove disastrous soon because it is not sustainable and neither is it able to solve our current problems. The government instead of cutting on expenditure is giving 5% inventive for exporters and remittances.

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