Zimbabwe Finance Minister gets stick from business leaders

BUSINESS leaders Monday took turns to dress down Finance Minister Mthuli Ncube and Reserve Bank governor John Mangudya for allegedly causing chaos in the national economy through policy summersaults.

At a business breakfast meeting in Harare, the business leaders said the two controversial officials’ policies did not speak to the needs of the Zimbabwean market.

They were reacting to earlier sentiments by the Treasury boss that “Zimbabwe was making progress” as witnessed by a recent World Bank rankings that placed the country as a lower middle income earning economy.

Said Ncube during his address, “After the major reform completed last week through Statutory Instrument 142 (which officially reintroduced the Zim-dollar), we can safely say that currency issues have been dealt with and can now be put behind us as we move to focus on growth and development.”

He said the economy was on the rebound “despite what you think”.

Ncube’s decision to paint a rosy picture out of deepening economy was enough to invite strong criticism by the business leaders.

Agribank chief economist, Joseph Mverecha said government’s much-vaunted economic policies being implemented are not different from those incepted during the country’s hyperinflationary era back in 2008.

“I wish I had the kind of confidence and exuberance you (Ncube) are showing but mine is lesser,” Mverechena said.

“Firstly, I recall that a few months ago, you said that inflation is going to come down but it is not.”

Mverechena said he served as an economist at the RBZ for 18 years and in 2006 and 2007, just like what Ncube was now doing, they hiked interest rates by over 200% but that did not “kill inflation”.

He also questioned the impact of Ncube’s budget surplus adding that it was being recorded at a time money supply was growing.

Mverechena warned that hiking interest rates to 50% has the risk of killing aggregate demand and pushing the nation into a recession.

Former Zimbabwe National Chamber of Commerce president, Luxon Zembe raised concerns over government’s “top-down” policies which he said failed to respond to problems of the day.

“Firstly, let me just say that this is a business meeting and you (Ncube and Mangudya) arrived 45 minutes late. I am appealing to you that such conduct in reminiscent of politicians. In business, we keep time.

“Minister, in your opening remarks, you are really doing a good job, but there is a phrase which worries me in your speech when you mention that ‘we doing well, what we are doing is good’ …”

“If you say ‘despite what you think’, it shows that you do not care about what we think and that’s not what we want because we are the stakeholders.

“You will have to appreciate that confidence is a function, you may demand, you may pull and do whatever you want but it is earned.

“It is a function of leadership and policy framework and Newton’s law is clear when it says that for every action there is a reaction,” he said.

Zembe said the reaction of the market must inform the minister that there was something fundamentally wrong and failure to listen to that and engaging with the markets will create a situation where the executive moves in its own direction while business stays behind.

He also accused Ncube and President Emmerson Mnangagwa of contributing to the confusion obtaining on the ground.

“Only 24 hours before the coming in of the new currency, both you, the President Mnangagwa and Ncube are saying that the new currency will come before the end of March next year but within a day you came with the new currency and by so doing, you are creating confusion and uncertainty and you are failing to recognise that we are business and businesses operate on a cycle where we plan based on policies,” added Zembe.

In his opening remarks, RBZ governor, John Mangudya had appealed to Zimbabweans to meet the test of love and support each other as exhibited biblically in the book of Matthew which says “Love thy neighbour as you love yourself”.

Rose Mpofu, a business leader from within the country’s private sector, insisted the problems the country was facing were not new.

“What government has embarked on is a complete overhaul of the economy and I want to advise that through the use of various instruments which they are introducing, a lot is going to happen, but what I would like to say is that in any change process, if you are going to move alone, you will not achieve anything.

“The issue of confidence building is very key because Zimbabweans have been there before, we have seen it all, we have suffered before and we do not want to keep going in circles,” she said.

Legal practitioner, Effort Jera said there was lack of cohesion among Ncube, Mangudya and the judiciary’s interpretations of statutory instruments.

He noted that following its introduction, Statutory Instrument 33 of 2019 which abandoned the fixed exchange rate between the US$ and RTGS$, parties that approached the courts received a ruling on June 19 2019 ordering the payment of contracts honoured before February 20 at the prevailing interbank rate.

“If the courts are giving contradicting explanations and interpretations can we say there is stability in this regime?” he asked.