Friday the 3rd of May saw the appointment of controversial Reserve Bank Governor John Mangudya to another 5-year term at the helm of the Apex bank. Mangudya is at best a divisive character in Zimbabwe with a truly eventful tenure as RBZ governor thus far. Among Mangudya’s highlights will surely be the bond note, foreign currency shortages and the task force appointment that rocked the Reserve Bank hierarchy
Many expressed displeasure with the reappointment of the governor sighting his pledge to resign if the bond note proved to be a failure. While no specific definitions of success or failure were mentioned the bond note was touted as an export incentive and solution to cash shortages. In both cases, the initiative did not improve conditions.
The move to reappoint Mangudya was announced late on Friday and there have also been sentiments that the government is simply trying to bury the news. It is not the first time that major announcements have been made at inconvenient moments.
Mangudya is credited as being the architect of the heist of US dollar deposits by Zimbabweans and replacing them with what we now know as RTGS dollars. But his reappointment must be viewed from his employers’ vantage point. Mangudya through having the sheer gall to announce the Monetary Policy Statement of February 2019 dug the administration out of a very deep hole. Government domestic debt had doubled since the new dispensation took over to US$9.5 billion (or so we believed). Through the MPS, Statutory instrument 33 of 2019 and the interbank market that debt now has a value of US$2.88 billion. So perhaps it’s not surprising that his employer is happy with him.
His tenure has also seen the comical. This cannot be directly blamed on him of course as it was Finance Minister Mthuli Ncube who appointed a communications task force whose first and only action (outside of appointment and resignation) was to finger the reserve banks governors as the force behind the parallel market for foreign currency in the country. Surely there are easier, more austerity friendly ways to implicate government officials.
If Mangudyas first 5 years are anything to go by Zimbabweans certainly have a lot to fear. His reappointment should be taken as nothing short of a clear sign that the employer is happy with his work thus far.