By Son Rise
IT is saddening to see the Reserve Bank governor continuing on a self- destruction path. While the governor has declared war against speculators in both the
forex and stock markets, the man is guilty of sparking off speculation of the greatest magnitude such that one could easily call him the “George Soros” of policy formulation.
The governor announced in his discredited policy statement review that banking licences will be reviewed annually. This means the banking public will not be sure which banks will still be standing come the next year.
Speculative tendencies will manifest themselves with the banking public withdrawing cash outside the banking system because they are not sure whether that bank will still be in operation the coming year.
When we all thought the banking sector was beginning to solidify the foundations shaken by the famous banking crisis, the governor through his wisdom, or rather, lack of it, fans the flames of uncertainty through ill-advised policies.
The governor’s policies are fraught with inconsistencies one wonders who advises this man. While on one hand he is pushing the government to grant 99-year leases (remember he is a farmer), the man is doing the exact opposite in the financial services sector.
In his policy review statement, the governor pointed out that banks should play an active role in supporting the productive sector.
While banks may want to do this, the policy framework clearly militates against such support. Most productive sector projects have a gestation period in excess of one year and surely which sane bank would want to lend for such purposes when they are not sure whether their licences will be renewed?
I really feel sorry for banks, which are caught between the proverbial “rock and hard place”.
Industry and commerce has also not been spared by the governor’s self-destructing policies. Planning is an essential ingredient in the success of all turnaround programmes. This has tragically been taken away by the governor through his one year renewable licences for banks.
Gono has accused the Zimbabwe Stock Exchange for “creating paper wealth, without real activities on the ground” yet he did exactly the same through issuance of the CPI linked Treasury Bills which saw unprecedented levels of cash flowing into the money market. Can anyone show me what improvement in productivity that has brought, rather than simply fund the insatiable borrowing appetite of the government.
Someone must put a stop to all this madness. We continue to watch and applaud self-destructing policies being forced down our throats. Someone must tell the governor that trying to close 15 holes with 10 fingers will not necessarily reduce the amount of flow. It may actually increase pressure on the remaining five, make them bigger and more leakage. His militant approach to the forex market will not help but worsen matters.
We must as a nation begin to ask ourselves honest questions (I wonder what happened to operation “Taurai Chokwadi”, Hope it applies to the governor as well). Are we as an economy better off than we were before Gono took over? If not, what went wrong and can we continue on this path and expect to be better off?
It is interesting to note that the Herald published just below the governor’s statement a story where Zesa is said to have announced a massive load-shedding of up to 10 hours a day. One shudders to think the effects this will have on productivity as many productive hours will be lost industry wide.
These are the pertinent areas which need urgent attention not wasting resources on addressing symptoms, rather let us deal with the issues. If these are indeed addressed, the governor will not have sleepless nights on how to tame the stock and forex markets, these will self-regulate.
Up and until the governor realises that the “Big Brother” attitude does not work and until he stops having a “Veterinary Surgeon” mentality where he is the only one who knows what this economic animal is suffering from hence is the only one who can prescribe a solution, then ours is a case of running up a downward escalator.
* Son Rise is a pseudo name for a bank treasurer.