HomeOpinion & AnalysisColumnistsMangudya shouldn’t gloss over cash crisis

Mangudya shouldn’t gloss over cash crisis


THAT Reserve Bank of Zimbabwe governor, John Mangudya, appeared before the Parliamentary Committee on Finance and painted a glossy picture on the state of the economy and money supply situation is unfortunate and unpardonable.

But in his presentation, Mangudya inadvertently revealed that banks are now holding more money than before with daily withdrawals now standing at $5 million against deposits of $6 million.

Mangudya seems to be living in cloud cuckoo land, living in denial or he is just plain foolish simply because he is enjoying the gravy-train and does not care what the majority poor Zimbabweans are facing on a daily basis.

The RBZ boss’ utterances show that Mangudya is in a state of absurdly, over-optimistic fantasy or an unrealistically idealistic state where everything is perfect.
Zimbabweans knew it from the beginning when he claimed if the surrogate bond notes fail he would resign.

We wonder what sound advice he is offering the new Zanu PF regime. In fact he should be one of those sent packing even if he is not yet 60 years — reason is he has no new idea to turnaround this economy.

Somebody please needs to knock some sense in Mangudya’s head quickly, otherwise he is destined to spoil it for President Emmerson Mnangagwa’s new dispensation’s mantra Zimbabwe is open for business even before the elections.

Even though Mangudya touted this as a good thing as this signalled that depositors were now more confident in the banking sector, one has to remember that those daily withdrawals are from the entire banking system.

We should remind Mangudya in case he doesn’t know that the whole banking sector supports 30% of the population and is made up of 19 banking institutions including building societies, commercial and savings banks.

Central bank statistics showed that last month, $138m worth of deposits were received by the banking sector against withdrawals of $135m and January had $146m worth of deposits received against withdrawals of $140m.

Since former President Robert Mugabe and his administration’s ouster in November 2017, banks have been advocating for more clients but the problem is they are not willing to give back money to the clients showing high levels of greedy.

People every day are still spending hours on end queuing to get their menial cash withdrawals.

Zimbabwe cannot compare to other countries such as South Africa and the United States of America, because the problem is that their monetary systems and economies are functioning to such an extent that consumers rarely need to use physical cash.

These countries use their own currencies backed by sustainable monetary instruments unlike in Zimbabwe, which has not had its own currency since 2009.

Since 1971 Americans have been able to utilize the dollar on the back of “full faith and credit” of their government whereas for South Africa it is backed by gold.

Though it must be stated that the US dollar is affected by commodity prices, it is not completely devoid of gold.

Further, almost all institutions in those two countries accept one singular form of payment unlike in Zimbabwe where companies are ‘choosy’ by refusing to accept bond notes or currencies inferior to the US dollar.

Thus Mangudya should not try to fault the majority claiming his surrogate currency is working, no not at all. He must just shut up or offer innovative ideas to jump-start the sagging economy.

Recent Posts

Stories you will enjoy

Recommended reading