HomeAnalysisA view from Mangudya’s tower

A view from Mangudya’s tower

Folks, bond notes are now a reality. It would be a dereliction of duty on my part to fail to apprise you.

Candid Comment,Brezhnev Malaba

With your indulgence, let me recount my encounter last week with Reserve Bank of Zimbabwe (RBZ) governor John Mangudya.

From the 23rd floor of the New Reserve Bank tower — Harare’s tallest building — the capital city is a stunning riot of colour at this time of the year, with dazzling-purple jacarandas and flaming-red flamboyants decorating the cityscape.

The trees, in full bloom, are a feast for the senses. But an anomaly soon catches the eye: there is not a single construction crane in view. This is very odd for a capital city in any part of Africa. Even the glory of spring—it becomes clear—cannot mask Zimbabwe’s catastrophic economic failure.

It is Thursday afternoon on October 27 and, although this is one of the hottest days of the year, the air conditioning, purring soothingly in Zimbabwe’s glitziest building, makes it feel like the middle of winter.

In a plush boardroom, five floors beneath the pinnacle of the 120-metre-tall tower, RBZ governor John Mangudya, an affable economist who beat the odds to land the most prestigious job in Zimbabwean banking two years ago, is not amused when asked by the Zimbabwe Independent why he has been highly secretive about bond notes, a controversial surrogate currency which the central bank is introducing.

“That’s the problem with you journalists. You behave as though you have been paid by some people to write negatively about your own country,” Mangudya fumes. To be fair to the man, he does not seem to be singling out any particular journalist for blame and there is no hint of malice in his tone. But you could cut the atmosphere with a knife.

When the Independent calmly tells him that he cannot cultivate public trust if he is unwilling to openly address suspicions that he is trying to bring back the ruinous Zimbabwe dollar via the backdoor, his voice mellows.

The bond notes, he explains, are not a rehashed Zimdollar but a 5% “export incentive” to reward Zimbabwe’s exporters. He says the surrogate currency will trade at par with the US dollar — a proposition which has been dismissed by economists as unrealistic.

Mangudya emphasises that the bond notes will be backed by a $200 million facility from the Cairo-based African Export and Import Bank (Afreximbank) and are not meant to circulate in the wider market but will only be disbursed by commercial banks to exporters.

As my encounter with Mangudya draws to an end, I cannot escape from the conclusion that the man is forthright, hard-working and determined. I also realise, however, that he has been condemned to a Sisyphean task — a tough, near-impossible assignment.

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