Zimbabwean President Emmerson Mnangagwa on Friday appointed globally respected economist and public policy expert, former banker Mthuli Ncube as finance minister and kept Winston Chitando in charge of mining, placing two technocrats at the helm of plans to rescue the country’s battered economy.
The 75-year-old leader is under pressure to rebuild an economy hit by lack of foreign investment, unemployment above 80 percent and acute dollar shortages that have hobbled some imports.
Mnangagwa won a disputed vote on July 30, the first election in the southern African nation since Robert Mugabe was removed by the army last November after nearly four decades in power.
In appointing Ncube, Mnangagwa wants to show the international community that he is giving priority to the economy and moving away from the Mugabe years where important cabinet posts were given on patronage lines.
Ncube, 55, is a former chief economist and vice president at the African Development Bank (AfDB) and was also a lecturer in finance at the London School of Economics and Wits Business School in South Africa.
He founded Zimbabwe’s Barbican Bank and asset management company, which were, however, put into administration by the central bank in 2005 after only two years of operations. The bank’s licence was later cancelled.
Ncube will be tasked with crafting an economic recovery programme as well as coming up with strategy to pay off Zimbabwe’s $1.8 billion arrears to the World Bank and AfDB.
In his latest article on how to awaken Zimbabwe’s economic recovery, Prof Ncube, suggested that President Mnangagwa’s government should review and suspend use of bond notes if the economic recovery process is to make significant success.
“I was one of the people who were of the idea that Zimbabwe should adopt the rand and join the Rand Monetary Union for a 7 to 10-year period. This is because South Africa accounts for 80 percent of Zimbabwe’s trade. So, clearly you want a currency that is linked to your largest trading partner.
“But I don’t think I want to argue that now because things have moved on and we are at a new juncture. What I would argue now is that we remove the bond notes currency because it is becoming a surrogate currency to the Zimbabwean dollar without the macro-economic credibility to support it,” wrote Prof Ncube.
“The bond note currency is bad money and we know that in economics, bad money drives out good money. It’s not surprising that the US dollar is now in short supply because people are not banking them. So the immediate course of action is to remove the bond notes and then let the US dollar become the core currency but over time we have to bring back the Zimbabwe domestic currency.”
According to Prof Ncube, the scrapping of bond notes will deal with liquidity issues in a big way.
Zimbabwe has been using the multiple-currency system since 2009, with the US dollar as the main mode of transaction. Prof Ncube further suggested the issue of domestic debt needs to be dealt with through Government expenditure patterns.
Chitando, a former managing director and chairman at the Impala Platinum and Sibanye-Stillwater joint venture platinum miner Mimosa, was favourite to be retained at the mines ministry, to which he was first appointed in Nov. 2017.
Mining generates more than half of Zimbabwe’s foreign export earnings and Mnangagwa has said the sector, which is attracting investors in lithium mining, will anchor future economic growth.
Mnangagwa also appointed ZANU-PF national chairperson Oppah Muchinguri-Kashiri as Defence Minister, taking away a key security portfolio from Vice President Constantino Chiwenga, the retired general who led the coup against Mugabe.
Zimbabwean swimming Olympic gold medalist Kirsty Coventry was a surprise pick for the youth and sports ministry in a cabinet that did not include any opposition officials.
Mnangagwa appointed eight new faces to his cabinet but there was no place for long serving ministers Patrick Chinamasa, Obert Mpofu, David Parirenyatwa and Simon Moyo.
“We would want to grow, modernize and mechanize our economy. We believe in the next five years, we will be able to transform our people into middle income citizens,” Mnangagwa told reporters after his chief secretary announced the cabinet list.
Mnangagwa had earlier received support from former President Robert Mugabe who said he now accepted him as Zimbabwe’s legitimate leader after initially accusing him of leading a “disgraceful” de facto coup that ended his near four-decades rule last year.
On the eve of the July 30 vote, Mugabe, 94, said he would vote for the opposition to remove Mnangagwa’s “military government”, expressing bitterness towards his one-time allies in the ruling ZANU-PF party.