Mangudya’s disastrous monetary policy requires drastic decisions at the RBZ

By Hopewell Chin’ono

I posted a Facebook note last night about the need to look elsewhere for a central bank governor.

The responses to my note were ultra-emotional than rational, folks argued that it will take away their sovereignty if the central bank is run by a foreign national.

How would someone who is working for you take this national sovereignty away from our country and its citizens?

We have enough evidence that a local person would clearly succumb to political pressures and end up doing things that have nothing to do with the central bank.

Those in power and those close to them will make that person do things that a foreign central banker will walk away from, because a foreigner will not have the burden of living here after an argument with the appointing authority.

The political class has ruthlessly manipulated the central bank because our institutions are weak and not independent.

I got a lot of emotional responses talking about sovereignty and at that point I realized that Robert Mugabe’s sovereignty ramblings, had an effect on many of us.

There is nothing sovereign about having a weak failed central bank.
The idea of appointing a skilled foreign central banker would be nothing new in the world of central banking.

The current Bank of England “reserve bank” governor is a foreigner from Canada, and yet they don’t even have trust, competence or corruption issues that we have with the global financial institutions.

I would like those opposed to this idea to explain how you will deal with the trust issues by appointing a local banker to a weak non-independent central bank.

Zimbabwe is saddled with a huge burden of confidence deficit issues.

Nobody in their right minds would bank their lifetime savings in today’s Zimbabwe banking architecture.  It is simply because of lack of trust and nothing else!

We must accept that our economy will remain dead unless and until we fully reengage with western financial institutions that can give us a reprieve in debt relief and or, give us new loans to kick-start our comatose economy.

One of the quickest ways of doing this is to appoint a central banker with a solid central banking track record behind them.

I have argued about this and met with emotional resistance that is not rooted in our economic reality.

I have NEWS for you folks, regardless of our legendary self-importance attitude, Zimbabwe does not have that person right now!

We do not have a person who can withstand the political pressures brought to bear by our successive governments and ministers of finance.

We have brilliant minds like Andrew Bvumbe, however they could only be able to function in an independent central bank not one which exists in a weak institutional framework.

We can fool ourselves writing acres upon acres of articles about how that person exists and about how we have qualified people, the truth is that we simply don’t have the correct architecture to allow such a person to independently do their work!

I know for a fact that Mthuli Ncube was appointed for that reason too, the President couldn’t obviously appoint a foreign Finance Minister.

However he can appoint a foreign central banker and he won’t be the first or last person to do so.

He chose Mthuli because he wanted someone who had the international pedigree needed to unlock some goodwill on the basis of his qualifications, but more importantly, international experience.

Many people had suggested names to the President but to his credit, he told them that at this point in time Zimbabwe needed a person who is internationally respected.

Now tell me a Zimbabwean who has been a central banker and has that sort of international respect in that area of central bank work! Just name one not two!

It amazes me when we talk about SOVEREIGNTY and yet we don’t offer solutions to the critical issues about the hurdles of trust and confidence.

Even my cousin at the village will have confidence in the banking sector if they hear that the new person in charge is not from around.

It is not because people from around are not qualified, it is simply because we know that they can easily be manipulated into losing track of their mandate.

Zimbabweans don’t trust each other anymore, it is a sad reality anchored in a legitimate argument about the past 20 years that saw a once solid economy ruined to the ground.

This lack of trust was self-evident after the August 1 killings, we demanded internationally respected investigators to be on the commission of inquiry because of the trust deficit and political interference experiences of the past.

Why didn’t we argue that foreign investigators would impugn on our sovereignty?

Didn’t we have people capable of leading that commission of inquiry amongst ourselves?

The reason is very simple, we didn’t trust our institutions to withstand any kind of political interference.

By appointing a foreign retired central banker to clean up the mess at the RBZ for three years, it doesn’t make Zimbabwe any less sovereign unless you believe Mugabe’s sovereignty ramblings.

England, a very wealthy and powerful country that doesn’t suffer from trust issues in its banking sector, appointed Mark Carney a Canadian economist and experienced central banker as the governor of the Bank of England.

Did Britain become less sovereign because of that appointment? Of course not.
We need to separate colonial legacy issues from today’s national economic realities.

We inherited a solid central bank and we screwed it up, we need open heart surgery in that area otherwise we are stuck for good where we are!

People like our very own James Manyika were advising an American President, Barack Obama, in the White House and yet we harp on about sovereignty at a broken central bank?!

Zimbabwe’s first black Chief Justice, Philip Telford Georges, was from the Caribbean Island of Dominica.

Did that take away our sovereignty or make us any less a country than we should have been?

Our very own Herbert Chitepo was Tanzania’s first Director of Public Prosecutions, did that make Tanzania any less sovereign then than what it is today?

The irony is that we don’t trust our political establishment and yet we trust it when it comes to giving us a competent, trusted, confidence inducing local reserve bank governor?

Here is a free prediction, we will get a local reserve bank governor and before we know it, they will be subjected to soft political pressure to carry on with the present un-central bank practices.

Don’t ever complain because today like Mugabe, you consider SOVEREIGNTY as more important to your lives than a successful economic turn around and building of the central bank institution!

You have turned a blind eye to the trust issues that the international community have with our country regarding the management of our monetary policy.

You have declared that there is a person amongst us who can fulfill that trust deficit.

Time will tell whether I was right or you whether you were indeed right that sovereignty is paramount for a broke country with NO currency of its own!

Bellow on about sovereignty! Others said that their beef is with ZANUPF, but they forget that ZANUPF now has a mandate to run the county for the next 5 years.

Whether you don’t like them or not, they are a legitimate political reality for the next 5 years.

You can’t put your life on hold for the next 5 years because you don’t like the President. It is futile and foolish.

This is now a time to come up with solutions and help the ruling party find its bearings.

Their failure is ours too and I believe that we can start doing so by throwing away the nationalist nonsense!

My argument is very simple, we need a central bank governor who is able to pick up the phone and ask for any sort of help from other international financial institutions.

We need someone who can be trusted by our partners in the world of economics and finance.

The President and parliament can then support this central banker to reform the central bank, making it independent and then appointing a local guy after three years.

The local central banker can now have the professional luxury of being in charge of an independent and strong central bank.

Failure to do that due to the Sovereignty brigade, the President should appoint someone like Andrew Bvumbe who can get technical assistance from foreign retired central bankers by setting up the necessary through policy making committees.

Hopewell Chin’ono is an award winning Zimbabwean international Journalist and Documentary Filmmaker. He is a Harvard University Nieman Fellow and a CNN African Journalist of the year.
He is also a Fellow at the University of Oxford’s Africa leadership Institute.

Hopewell has a new documentary film coming out which is looking at mental illness in Zimbabwe called State of Mind. State of Mind has been nominated for a top award in Kenya. You can watch the documentary trailer below. 

Hopewell can be contacted at [email protected] or on twitter @daddyhope