Mangudya taunts ‘ignorant’ Ncube, MPs

BY VENERANDA LANGA

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday denied that the central bank was involved in any quasi-fiscal activities and called out Finance minister Mthuli Ncube and parliamentary committees for not understanding the issues involved.

Mangudya made the remarks when he appeared before a joint meeting of Public Accounts and the Finance committees to discuss the legal basis for the RBZ undertaking quasi-fiscal activities and how the amounts were used in financing fuel procurement and other commodities. He told the legislators that they, along with Ncube, do not understand the term “quasi-fiscal activities” and that they need a workshop to unpack it.

Bikita West MP Elias Musakwa (Zanu PF) asked Mangudya to explain how the RBZ acquired loans amounting to almost $1 billion and how much money was channelled to public sector investment programmes, recurrent expenditure and stimulus programmes.

“I do not think your question is relevant at this moment because those are not quasi-fiscal activities,” Mangudya said, adding that the apex bank had not carried any quasi-fiscal activities since 2014.

“Quasi-fiscal activities at the RBZ do not exist and it is important for Zimbabweans to know the truth, and what RBZ used to do when we bought tractors, generators and baccossi – those were quasi-fiscal activities and so do not confuse those with what is happening now and people should not abuse the RBZ by confusing those with what is happening now. They were taken over by the RBZ Debt Assumption Act.”

Tendai Biti (MDC Alliance), however, pressed Mangudya further by rephrasing Musakwa’s question saying: “In your Monetary Policy Statement of February, you said there were certain things that were going to carry on using the old system, and you said the bank, through the foreign currency committee will continue to supply foreign currency for fuel, wheat and 14 other products, and in our definition these fall under quasi-fiscal activities.”

Biti pointed out that the RBZ has no mandate to give money to fuel players, Zesa and others because these were essentially activities of central government; and also in terms of section 6 of the RBZ Act the bank’s functions were only to regulate the country’s monetary system, achieve and maintain the stability of the Zimbabwe dollar, and to act as banker and financial adviser to government and economic stability, among others.

But Mangudya insisted that the MPs had a wrong definition of quasi-fiscal activities.

“It is a wrong definition. Quasi-fiscal activities are activities done by the central bank and any other bank at below the market price. We need to use an international definition so that Parliament does not have its own definition. This economy is going through difficult times. There is no one in this country who can borrow funds to help Zimbabwe. So these are just foreign names. Zimbabwe is a step child in a family of nations and it is difficult to deal with a step child so that it does not have kwashiorkor and die.

“My core business is in section 49 of the RBZ Act, to ensure there is foreign currency. When I give money for fuel, it is only called a foreign allocation. I think as MPs you need a workshop with RBZ on what are quasi-fiscal activities,” Mangudya said.

Biti then asked him to explain why Ncube, in his 2019 budget statement mentioned that the RBZ was engaging in quasi-fiscal activities and was going to ensure that they are liquidated.

“I think Ncube was misinformed on that point because I asked him to give me three or one quasi-fiscal activity I was engaging in and he could not. That’s a wrong definition that the minister was using and he also needs a workshop on that. Do not use Zimbabwean language on that,” Mangudya said. Biti then ordered Mangudya to give Parliament a document detailing how much he paid in what he termed “foreign allocations” and not quasi-fiscal activities.

11 Comments

  1. i am very impressed by this magundya guy and the way he has articulated and acquitted himself on issues to do with reserve bank which have exposed a number of people including the misinformation that the economy picked up during gnu because of biti which he clearly explained and told everyone that is was all blue lies as rbz never had any financial usd cover under that period ,well done mr governor

    1. Its pity some pple are impressed with clowning or by pple who play clowns on matters that ought to be addressed truthfully. For instance, if you take John’s own definition of “quasi-fiscal”, which I agree is correct anyway, and juxtapose with RBZ involvement in funding fuel guys (the queen bees & sundry). Did it make any economic sense? Certainly not hence the reason ED had to increase it by over 150% on that fateful day. So, why such mendacious act in the first place? According to his preferred definition that qualifies as quasi-fiscal activity. How about the whole notion that 1Bond = 1 RTGS =1USD & only to work up one day and rob all and sundry by telling us that in fact Bond/RTGS are 2.5 times less than 1USD. Surely what can be impressing about such daylight robbery of citizens thru deplorable shenanigans at which RBZ/Magudya is at the centre?

  2. If everyone is ignorant except him, can he kindly tell us how the RTGS balances increased without an increase in USD balances?

  3. The beautiful ones are not yet born

    Lol… Govenor whatever they are called, the point is that you have no business doing what you are doing.

  4. these old modem workship..

  5. Hahahahaha… Mangudya is trying to be smart here and play around with words. The fact that RBZ is doing allocations of foreign currency to companies and having a list of priorities is questionable. Some of the allocations are going to non deserving entities… What about the facilities that state owned companies are drawing on… case in point is the financing of the purchase of aircraft for Zim Airways.. All these obviously do not fall under the mandate of the RBZ.

  6. Surely ‘quasi fiscal’ simply means similar to or same as finance in this case activities. In lay language allocating foreign currency to business is a finance ministry activity being done by the RBZ, so whats Mangudya going on about?

  7. Ka Mangudya hakana respect nhai. Karikufumura varume vakuru kudaro

  8. Dr may you do your workshop in your RBZ boardroom to save the little we have.

  9. I think it has been refreshing to listen to the RBZ Governor and its true that there is a need a need for a workshop to unpack and demystify some of the financial terminoloy. On the other hand am disappointed by Hon Biti who seem to be hell bent on scoring political points than taking the country forward. The main problem in our country is trying to resolve an unusual problem in uncertain times using conventional approach. It doesn’t work. Like Trump underlined Zimbabwe poses an unusual threat to the US, therefore sanctions are justified. The RBZ should intervene where necessary to stabilise to economy and monetary services. That’s the norm, Bank of England bought various private banks in 2008/9 in a bid to normalise the situation. That’s what is called managing the economy. Where the situation is normal you leave it to the market.

  10. this finance committee, can’t we have people with economics background to run it so that we ask the right questions and see if we are going in the right direction.

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