Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has said the central bank should not be taken as a scapegoat with regards to the country’s ‘bad’ monetary policies.
The apex bank governor shocked parliamentarians when he said that central bank should not be blamed for the unpopular and inconsistent monetary policies, but instead the blame should be directed to government ministers.
Mangudya made these sentiments on Monday while giving oral evidence before the Parliamentary Portfolio Committee on Budget, Finance and Economic Development
“I will tell you the role of the central bank; it is to manage money supply in the economy to guard against inflation,” he told the committee.
He said blaming him is therefore misplaced. His comments came after the MPs had accused him of promulgating bad policies, saying they had failed to fulfil the economic aspirations of ordinary Zimbabweans.
Mangudya defended the central bank, saying the institution was just a mere advisor to the government.
“The role of the central bank is to advise the Executive and central bank is not the Executive. Ours is to advise the Cabinet. You cannot then blame me the messenger for relaying the message or to say the messenger has failed.”
Mangudya said the country was facing deep economic challenges and there was need to work hard in reviving the economy.
“The frequency of meetings in this country is a sign that things are not right. It’s a sign that the economy is not doing well. We need to work very hard, “ he said.
However, MDC Vice President and Harare East MP, who is also former the country’s Finance Minister, Tendai Biti maintained that the RBZ is to blame especially for carrying out rogue money printing activities.
“Thanks to high fiscal deficits monetised through rogue money printing activities by the RBZ, the SMP (Staff Monitoring Programme) is dead and irredeemably dead.
“The mismanagement of foreign currency and monetary policy, corruption, lack of reforms and political banditry make Zimbabwe a basket case that should be avoided like a plague,” said Biti.
Meanwhile, renowned political commentator and International Human Rights Lawyer Dr Pedzisai Ruhanya said Mangudya should accept the blame, for he is an active participant in the government’s ruinous activities.
He said Mangudya should have resigned instead, rather than continue accessing unlimited perks from the same government that is rejecting his ‘good’ advice.
“If your advice is not taken seriously by the government and you don’t want to take responsibility for your failed monetary policies, why does your management at RBZ remain in place; access to unlimited resources,” he said through his twitter handle.
Apparently, applied economist at Johns Hopkins University and senior Fellow & Director at Troubled Currencies, Professor Steve Hanke is on record for saying that as long as Zimbabwe through the central bank continues to print money the country’s financial madness will not stop.
“As long as Zimbabwe continues to print its own money, it will remain in the grips of monetary madness. It must dollarise to crush inflation and assure growth,” Hanke once said.
Meanwhile, since Zimbabwe abandoned the multi-currency system a few years ago, the country has been printing money, as inflation continues to dog the local currency, amid rumours of higher denominations being planned.