via Bulawayo24 NEWS | New RBZ Governor is not a magician by Rumbidzai Mashayahanya 24 March 2014
Incoming Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya will be expected to perform nothing short of a miracle and become the biblical Moses that can lead the RBZ out of its financial doldrums and bondage. As the new occupant of the RBZ’s 22nd floor, Mangudya will take over, starting May 1, a central bank hamstrung by debts, and seriously undercapitalised to effectively enable it to perform its role as the lender of last resort and other important central bank functions.
A seasoned banker popularly known for his ‘fortune favours the bold’ statement, Mangudya has been CBZ chief executive since 2012.
Having worked for one of the country’s best-performing banks, which he joined in 2000 as general manager for international banking and rose through the ranks to executive director in 2004 and then managing director in 2006, before becoming chief executive in 2012, there is no doubt about Mangudya’s credentials as a noteworthy banker.
The CBZ has since ‘morphed’ into government’s primary source of top-level expertise, as the former RBZ governor Dr Gideon Gono also hailed from CBZ. At the CBZ, Mangudya was in charge of a veritable number of government accounts. His assumption, as governor, comes with new challenges and responsibilities from which a lot is expected of him, but it is a domain he is conversant with.
His appointment is no magic trick. He is faced with a tough challenge to make the RBZ work again and cease to be the ceremonial central banker it had become over the last few years.
As a technocrat, he should have a smart team of experts to guide him to glory. He will also have to content with some harsh, radical economic decisions taken by his predecessor and former boss, Gono, some of which are still haunting the economy.
Economist Chris Mugaga said the incoming governor must consolidate on the successes recorded by previous governors in both the payment system and banking reforms.
“This appointment is significant for the financial sector and has been long overdue. It brings harmony to the banking sector.
“However, because of the sensitive history of our economy, many are looking up to the success of the country’s economy as driven by the central bank.
“We also have to look at the RBZ legacy of leadership from the times of (Leonard) Tsumba, Kembo Moyana and Gono to understand the expected roles of the new governor,” Mugaga said.
Economic commentator Peter Ngurube said people should not expect too much from the new governor.
“Zimbabwean companies have become too depended on government and the central bank and yet they have relaxed and become too lazy to come up with innovative ideas to keep their businesses afloat,” Ngurube said.
“Most of these companies forget that with the current economic environment there is little the central bank can do with regards to the macro-economic stimulus.
“All these entities need to stop looking at personalities of who is going into which office, but work on their corporate governance. If you look at companies like Gulliver, PG Industries and Starafrica, these companies did not collapse because of the central bank, but rather as a result of mismanagement.”
While the role of the central bank and the success of a governor would be determined by the management of the rate of inflation, interest rates and employment creation, Mangudya has his work cut out to manage banks, improve banking sector’s liquidity and minimise the rate of bank failures.
Dr Mangudya holds a Bachelor of Science degree in Economics and a Master of Science in Economics from the University of Zimbabwe, as well as a Doctorate in Philosophy in Business Administration from Washington International University.