Last week the recently appointed Governor of the Reserve Bank of Zimbabwe (RBZ), Dr. John Mangudya, presented his maiden monetary policy statement.
He deserves great commendation for his courage, realism, and determination to revive the Zimbabwean economy and effectiveness of management and control of the nation’s monetary policies, rules and regulations, and administration.
The only significant reservation is that in part the attainment of the monetary policies declared objective is directly, or indirectly, linked to government heeding the RBZ advice.
At the outset of his policy presentation, the Mangudya said: “The nation needs to work as a team to confront the challenges facing the economy. We are in it together as a nation. We cannot be bystanders.
We need to put in place bold and pragmatic measures for the recovery of the economy”. He also said, practically and realistically added: “It is undeniably clear that the indisputable panacea to the challenges that the economy is facing is to stimulate production for economic recovery through pursuing consistent, transparent and predictable economic policy measures.
This compels the nation to go back to basics in order to effectively treble the challenges.
“We need to increase production of goods and services in the economy in order to increase economic growth, employment, exports, tax revenue, tax base and liquidity. Economic growth is key to economic prosperity and poverty reduction.
Zimbabwe has come a long way and too many things have happened and said about this country, good and bad ones. We now need to move forward without looking backwards. The time has come to move forward to achieve the goal of economic prosperity. The time is now. It’s doable. We can do it. We must do it.”
This is in marked contrast to the prevailing nationwide mood of doom and gloom as most people have convinced themselves that Zimbabwe will never secure substantive economic recovery and viability. In significant contrast, founded upon realism and not upon wishful thinking, the governor further said: “As Monetary Authorities we are confident and optimistic that…….back to basics and discipline are achievable.
We have, as Zimbabweans, done it before and there is no reason to think otherwise. We need to be positive and minimise negativity in order to turn around the fortunes of this economy. The challenges we are facing as a nation are not insurmountable.”
As part of trying to resolve Zimbabwe’s economic ills, and achieving real and meaningful recovery and growth, he sought to identify the role of the RBZ therein, as distinct from the roles of government, the private sector, and others.
To that end he said that RBZ is repositioning itself “by going back to the core principles or functions of control banking, which are basically to be a banker to Government, administrator of the national payment system, regulator of financial institutions, manager of exchange control, supervisor of bank use, promotion and suppression of money laundering, lender of last resort and policy advisor of Government”.
He implied that RBZ must be wholly, and absolutely, focused upon those roles and functions, and must address them vigorously and constructively, concurrently while not pursuing any other activities.
The governor’s comprehensive policy statement then extensively overviewed past and currently prevailing economic challenges confronting Zimbabwe as well as how to address the following problems:
Tight liquidity conditions;
Rising formal unemployment;
Low production levels;
Non-performing loans; and
Disproportionate trade balance.
Preceding the identification of the major functions which the RBZ will stick to, the governor stated that key to addressing those tasks is for Zimbabwe must to go “back to basics, including :
Respect for the rule of law;
Respect and love of each other as patriotic Zimbabweans;
Respect of the environment;
Policy clarity, consistency, transparency and predictability;
Nurturing of a positive business culture;
Nurturing of productive work ethics and a culture to take responsibilities;
Visible fight against corruption, smuggling and profiteering;
Insulation of a culture of paying bills, loans, duties, etc. and
Mangudya emphasised that such back-to-basics policies and principles are achievable, as has previously been done by Zimbabweans. He stated that: “We need to be positive and minimise negativity in order to turn around the fortunes of this economy.
The challenges we are facing as a nation are not insurmountable.”
After giving such an extensive, comprehensive, and concrete overview of the economy and the revival agenda, including understandingly stating features which will inevitably have been abhorrent to many in government and in the public service, the governor thereafter considerably detailed policies the RBZ will now intensively pursue to ensure economic recovery. Some of these will be reviewed in this column next week.
Mangudya deserves high commendation for his comprehensive endeavour to recognise the positives, the ills, and remedial action to Zimbabwe’s ailing economy, and for his unhesitating intention to pursue delivery of those objectives, irrespective of whether or not those remedial actions fit in with governmental policies, actions and ideas.
Clearly the governor places economic recovery and consequential improvement of lives of the Zimbabwean people foremost, well ahead of any vested interests. He has striven to call “a spade, a spade”, and to plan effective measures and controls for the uplifting of the economy and the populace.