Infighting between Zimbabwe's finance officials spills into the public
Harare, Zimbabwe (PANA) - Zimbabwe’s Finance minister Mthuli Ncube and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya have reported different weekly numbers of foreign currency traded on the inter-bank foreign exchange market, showing a growing discord between them.
Last month, the government of Zimbabwe officialised local currency and created an official foreign currency exchange market to enable companies to easily buy foreign currency from willing sellers due to acute foreign currency shortages in the market.
Appearing before the Portfolio Committees on Public Accounts Budget, Finance and Economic Development on Tuesday, Mangudya said: “On average for the past three weeks since the inter-bank market started it has been about US$12 million that has been traded.”
However, this contradicted what Ncube said in an interview with American news media Bloomberg on 6 March during his visit to Washington DC.
“Last week (week ending 2 March, 2019), we traded about US$7.5 million around about there and this was just the beginning. Remember, for the last 10 years Zimbabwe has had a fixed currency regime of one to one with the US dollar so the trading has started and can only get better,” he said.
According to sources at the Banker’s Association of Zimbabwe, the accurate figures to be trusted should come from the RBZ and as such indicates a lack of coordination between the minister, Ncube and the Governor, Mangudya even though the latter is expected to give the former regular updates.
“Both figures are close to the average but we should use the figures from the RBZ. What is needed is for the RBZ to release an official report. However, the honest truth is that there have been more buyers than sellers of foreign currency since the introduction of the inter-bank trading platform,” the source said.
In recent months, tensions have been growing between Ncube and Mangudya over the direction Zimbabwe’s comatose economy should take towards recovery despite the former being the latter’s boss.
RBZ insiders say the reason why Mangudya has been fighting with Ncube is to try and keep his legacy intact as he is seeking a second term as the RBZ boss due to his current five-year term expiring on 30 April, 2019.
This comes as Zimbabwe’s President Emmerson Mnangagwa, in November 2018, revealed that he wanted an extension of Mangudya’s contract for a second term.
Last month, Mangudya’s biggest monetary measure of introducing the quasi currency ‘bond notes’ back in November 2016 at parity with the greenback was devalued into a local currency due to Ncube’s influence in the 2019 Monetary Policy.
Business, economists and analysts had previously seen bond notes as a major cause for the Zimbabwean economy worsening since it's inception.
Tensions between Ncube and Mangudya, as widely reported by Zimbabwean news media, culminated in a heated exchange at a meeting held last month during the week ending 9 February, 2019.
In the meeting, Mangudya, in a fit of rage, tossed paper files at Ncube and walked out, angrily slamming the door as tempers flared in an incident that left top government officials stunned, according to several reports.
-0- PANA TZ/MA 12March2019
