via New RBZ governor urges discipline on indigenisation | The Source May 7, 2014
The new central bank governor, John Mangudya on Wednesday urged government to strike a balance between its indigenisation policy and promotion of foreign direct investment to revive the country’s ailing economy.
The law, which requires foreign companies cede 51 percent shares to local blacks has been blamed for scaring away investors.
“The greatest panacea of our challenges is discipline…..enough to find an equilibrium position or a point of harmony between the need to promote indigenisation and the need for foreign direct investment and the ability to synchronise the two,” said Mangudya in his first statement after taking office on May 1.
He said there was also need for discipline in the utilisation of the country’s resources, to increase production and to refrain from “living beyond our means, as this would bring greed and corruption.”
Mangudya said the past three years have been challenging for the economy and people as the period was characterised by high unemployment, liquidity challenges and dwindling tax revenues.
He cited low aggregate domestic demand, deterioration of the balance of payments support, banking sector vulnerabilities and low industry capacity utilisation as some of the challenges that needed to be addressed.
“The economy is weaker and the financial system is depressed. We need to be courageous and skilful to manage the situation on hand,” he said.
He called for the promotion of value addition and increased export earnings to enhance liquidity in the economy.
Mangudya took over from Gideon Gono, who headed the bank for decade until November last year when his term expired.
COMMENTS
blah blah blah-isn’t he a fountain of wisdom. Stating the obvious apart from the equilibrium position.
Governor – RBZ is technically insolvent and has no moral authority to make any comment on the economy. For starters it needs to understand that forex earned by individuals and businesses belongs to those individuals and businesses. It does it belong to govt – no matter how the bank attempts to account for it (National Capital Account, etc). Forex in local private accounts (should we be so brave as to leave our cash there) does not solve govts liquidity problem – unless of course govt intends hijacking these accounts? – which brings us to the central issue of a LACK OF TRUST. Your predecessor did an excellent job in ensuring TRUST in the banking sector, the RBZ and govt was completely extinguished, along with our bank balances. Do not therefore expect long-suffering Zimbabweans to TRUST any statements that emanate from the bank or the govt. Statutes regulating land acquisition and indigenisation and exchange control must be REPEALED and consigned for ever to the bin of history. Govt has the capacity to earn its own forex but fails to cover its debt because of corruption, maladministration etc. You would do better to direct focus on govts inability to budget and account . We wait for RBZ to publically account for its exorbitant debt.
Do you have the courage to be unequivocal?
Doritt good comment. Sadly all the current zanupf ministers and zanupf itself has forever destroyed any trust, and chance of investment, and any recovery. No one trusts zanupf no one listens to their lies and promises. Zanupf have failed for 34 years.
Wait until DisGrace makes this man her personal banker and puts him in the same pocket on her bossom Gono occupied for so long,he will be singing a different tune.
For he has not tasted stolen money. Once he does he will change his tone and join the gravy train.
Another candidate for ideological re-orientation.What discipline is talking about, all our policies are tailor – made and focused to empower our trampled masses.
What a disappointment this John Mangudya has turned out to be already. In a globalising environment indigenisation does not fit at all. Investment destinations quadruple and leverage on minerals and things like that goes out the window. Zimbabwe must compete for the FDI with other countries where such artificial barriers for primitive accumulation are just not warranted. This is basic economics. Protectionism and other restrictive practices just render the country non competitive. Even uncompetitive capital markets from China will have second thoughts investing here. In any case we are only 13000000 people where investing here does not guarantee billions in returns. So effectively the blue chips write us off. The result is that we get nothing coming our way. Now it is clear your doctorate is from a back street institution for sure.
Quite right Mandy…….Indig must go completely but even that won’t work if ZANU are still running the country cos the world will not believe their lies, and rightly so.