Litmus test for new Zimbabwe Central Bank Governor as he delivers maiden Monetary Policy Statement

RBZ Governor John Mushayavanhu
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TODAY (Friday) marks a momentous occasion for the new Reserve Bank of Zimbabwe (RBZ governor, Dr John Mushayavanhu as he moves to present the much-awaited Monetary Policy Statement (MPS).

The MPS which is expected to set out actions to control a nation’s overall money supply and set the stage for economic growth is undeniably coming at a time when ZWL has recorded significant depreciation by levels over 70% making the calls for reform even more urgent.

The new exchequer who has been nicknamed “John the Second” due to similarities in his first name with the outgoing governor, also synonymous with the two Biblical books of John has ascended to office during the country’s toughest phases of crippling El Nino-induced drought.

To this end, President Emmerson Mnangagwa has since declared the drought a State of National Disaster amid revelations that 80% of the nation received below-normal rains.

The ordinary folk have been on the bitter receiving end as the majority earn salaries in ZWL in an economy where the employers are more keen to keep the generated greenback as a hedge against unforeseen circumstances.

Within the matrix of challenges, the business community fronted by the Confederation of Zimbabwe Industries (CZI) had since announced the delays in the announcement of the 2024 MPS were not helping matters and adding uncertainty to the operating environment when inflation is already high encourages speculation as business tries to hedge against the unknown.

“The MPS policy target should be to curtail any further inflation shocks which would drive month-on-month inflation further. However, the policy target of 1 to 3% month-on-month inflation now looks out of reach, hence the delayed Monetary Policy Statement (MPS) is expected to revise the targets,” CZI said among other demands.

Other economic experts believe that the MPS must address fundamental pressing issues such as cutting back on the money supply and infusing the much-needed confidence to keep the economy ticking.

For Labour, the expected demand is to see the MPS being directly linked to tangible economic healing attributes like job creation and playing a part in encouraging formalisation of the informalised.

Dr Mushayavanhu will not have done justice if the measures in place do not speak to the hard-pressed ordinary folk who have one demand – a stable and working currency. Thankfully, pre-emptive announcements have since hinted at plans to introduce a new Structured Currency to infuse long-term stability.

Sadly, the new currency initiative has since taken over hot calls with some sections of the society already criticising the initiative way before its inception.

The reality is that the new governor is flying into the storm of a deeply divided nation struggling to find each other on the political front and whose memory is jammed by a long history of economic instability and policy shifts.

However, some former government officials like the exiled ex-Cabinet Minister Walter Mzembi have since taken to social media defending Mushayavanhu and begging the nation to give him a chance based on their past working experiences.

Today’s MPS announcement is indeed a litmus test marking the beginning of a journey for a man who has legacy issues, some of which are way beyond his control to address in front of a highly sceptical audience. – Newzim