Zimbabwe expected to unveil pro-poor policy
RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya is on Wednesday expected to present his 2015 monetary policy statement (MPS), amidst growing restlessness in an economy plagued by a worsening liquidity crisis and job cuts.
Mangudya who is on record saying he would not experiment with the economy and people’s lives during his tenure but would find ways to spur economic growth, saying the economy was shrinking largely due to indiscipline by Zimbabweans.“I would rather experiment in a laboratory than in an economy,” Mangudya said.
Some of the challenges facing the economy include unreliable power supplies, corruption, lack of transparency, low capacity utilisation in industries and lack of competitiveness for locally manufactured products.
Mangudya says mining, tourism and agriculture were the three sectors key to driving Zimbabwe’s economic growth, and that the RBZ would come up with measures to buttress these sector’s efforts to boost the economy.
The monetary policy will be Mangudya’s third since he assumed the central bank’s governorship in May last year, succeeding Gideon Gono who steered the ship during the country’s tumultuous period of hyperinflation.
The country is saddled with a huge debt overhang which will continue to undermine the country’s ability to attract offshore credit at competitive rates. Zimbabwe’s foreign and domestic debt is estimated to be about US$8 billion.
Economists said given the current situation where the country was using a basket of foreign currencies as legal tender, not much was expected from the monetary policy as the RBZ had become feeble on account of lack of the country’s own currency to influence monetary policy.
Economists said it was important to note that Mangudya had very little or no room for manoeuvre because of the inability of the central bank to print money and influence interest rates and other monetary policy issues.
But they said he had to had to urgently deal with the lack of confidence in the banking sector by ensuring that frail institutions still operational were either closed or downgraded to lower tier financial institutions with lower capital requirements.