RBZ governor should proceed with caution

RBZ governor John Mangudya

RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya has proposed a general wage freeze for workers at a time when the majority of Zimbabweans earn far below the poverty datum line of $450 per month.

Critics view Mangudya’s proposal as being anti-worker coming on the back cloth of revelations that most firms are battling to pay workers on time and let alone full salaries every month.

The MDC-T is probably right in rejecting Mangudya’s monetary statement particularly what it considers as the misplaced view that wages are the only cost drivers, pointing out that public utilities, imports, corruption and profiteering are some of the causes of inflation not wages.

The Zanu PF regime is clueless and should own up.

Mangudya’s monetary policy statement is indeed clearly anti-worker and not pro-poor.

How can millions of Zimbabweans whose Zimbabwe dollar bank balances were ravaged by government-induced hyperinflation only get $5 as compensation? This can only mean that the governor is bereft of any new ideas to deal with the residual effects of hyperinflation. 

We agree with the MDC-T that the governor is presiding over a comatose economy and no amount of financial engineering is going to reverse deflation and the liquidity crunch.

The so-called “rebalancing” of the economy is indeed a pie in the sky. What needs rebalancing is the politics of the country which make the economy hostage.

The talk of competitiveness in the absence of foreign direct investment will not work. Competitiveness requires social dialogue and the full consummation of the Kadoma Declaration.

The Monetary Policy Statement is a damp squib. The financial sector is like a jungle without global positioning systems. Most banks are on the verge of collapse and depositors risk losing their savings.

The $200 million borrowed from Afrexim Bank for the resumption of interbank facilities is not enough as it will be swallowed by non-performing loans and externalisation.

The governor must focus his attention on the odious RBZ debt of $1,3 billion and explain to Zimbabweans how the debt was accrued and if possible publish the list of beneficiaries and measures he intends to institute in order to recover public funds.