I miss Gideon Gono. That’s only because John Mangudya, his successor at the central bank, is that turtle you can’t pick out from the rocks, which when it strays onto the road, looks and sounds like a toad.
WITH TAWANDA MAJONI
Gono did lots of stupid things, but in a colourful and exciting way. He was appointed governor of the Reserve Bank of Zimbabwe (RBZ) in late 2003, ominously stepping into the country’s first ever cash shortages in post-colonial history, and gave way to Mangudya 10 years later.
During his time, Gono gave us travellers’ cheques and called them money. It looked like it was working for a few days.
Then he had another vision and gave us bearer cheques and still called them money. He stuck with the bearer cheques that were printed on bond paper up to 2009 when whirlwind inflation swept them out to sea and brought the multi-currency to shore. As he was at it, the bearer cheques changed faces and figure value every other night, your head was left spinning.
Gono also started giving people wheelbarrows, harrows, ploughshares, scotch carts and generators straight from the RBZ headquarters. He deployed central bank personnel to the money black market where they bought real US dollars with decorated bond paper. People talked about his stunts from the edges of their seats and marvelled at his useless energy.
The difference between Gono and Mangudya is that the latter, almost half-way through his tenure at RBZ, is also doing lots of stupid things, but in a dull and dour way. In early 2016, government started dawdling with the sad experiment of bond notes. Bond notes, by the way, are the bad money that, as we now know without any doubt, drove out the good money and left us with the second round of cash shortages.
Mangudya promised us that he would resign if the bond experiment failed. It did, but he didn’t. The bond note, together with the bond coin, is almost 50% weaker than the greenback since its introduction in late 2016. But Mangudya is sticking around. Not that I ever expected him to honour his promise. Turtles don’t resign from anything. They move from one craven to another and pretend they are suffering from a short memory so that you don’t take them seriously without them exactly believing they are a crass joke.
Their problem, though, is that they tend to forget that we need to forget them, and, now and then, get croaking about all sorts of things that we don’t want to be hearing about. Instead of admitting that the bond note has weakened so sharply and driven away the US dollar in the process, what does Mangudya do? He phishes around and starts blaming the greenback for the prevailing cash crisis.
Just recently, he announced that the RBZ had stopped dispensing US dollars to banks. His thinking? Depositors are withdrawing the greenback and taking it to the money black market, thereby fuelling the cash crisis by selling the foreign currency at a premium. Being the turtle that he is, Mangudya clearly fails to notice that his croaking doesn’t make sense and would only take some creature from Neptune to believe it.
For starters, the greenback amounts that a small number of banks is giving out to ordinary depositors is too little to explain the huge amounts of foreign currency circulating on the black market. Of course, it makes sense for depositors to rush to Roadport or Copacabana to exchange the $20 they get per week for $25 or so bond notes. But that is because there is no other way to do things. It was government and the RBZ that created bond notes that in turn drove away the good money in spite of all the fervent warnings.
It would, therefore, never wash for Mangudya to start blaming hapless depositors and money changers for the current cash crisis as he is trying to do. It is a fact beyond reproach that in early 2016 before Finance minister, Patrick Chinamasa and Mangudya got jaw-jawing about bringing the bonds on board, the forex black market was so depressed it was almost non-existent. Things changed when official talk about the bond notes gained momentum and, ultimately, this weird currency was introduced into the system.
That is when the black market hawks that had more or less gone into hibernation in early 2009 got flying back.
Mangudya’s monetary policy and Chinamasa’s fiscal policy had created, once again, a fat opportunity for parallel market dealing.
That aside and back to the source of the money circulating on the black market. As I said, it’s granted that the paltry amounts that depositors are getting from the banks are feeding the black market in their small way. But it doesn’t mean that if a baboon covers its face with its paws, the stone will not hit it. The painful truth that Mangudya seems to shielding his mind from is that, actually, most of the US dollars that are going to the parallel market are coming from the banks through the back door.
Isn’t it on record that bank officials have been caught taking out huge stacks of greenbacks? They are conniving with these so-called money changers. And it’s unsettling that the RBZ has a surveillance system that must pick these illegal transactions in real time. That makes the central bank an accomplice, without doubt.
What does this then mean? Instead of rushing to put the blame on small fish in the ponds, Mangudya must learn to be fishing in the deep seas. But because the system that he presides over is an accessory to the crisis, he must recuse himself and let an independent agency do the work. The solution doesn’t lie in a hurried and fateful decision to withdraw US dollars from the banking system so as to starve the small fish, but to make sure that it works properly and above board.
Come to think about, the absurdity goes beyond that. When the bond notes were introduced, we were told that they would be dispensed to industry and commerce to incentivise export-oriented production that would generate much-needed foreign currency. That was quickly forgotten, of course, considering that even fake prophets from Mahuhwe are now getting bond notes from the banks. That looks like an unintended admission that the bond note failed the day it landed or, at the funniest, that Mangudya has developed this weird idea that we are all export oriented producers who must, exclusively, be getting this fake currency from the banks.
Maybe it’s time Mangudya started seriously thinking of resigning as he promised back then, instead of scraping for scapegoats everywhere and boring us in the process.