MDC-T says Mangudya should resign over Zimbabwe’s the cash crisis

Full statement:

Reserve bank Governor is part of the crisis

The desperate move by the Reserve Bank of Zimbabwe Governor, John Mangudya, to try and arrest the prevailing debilitating financial crisis has all but exacerbated the situation. From the beginning, Mangudya’s mooted idea to introduce the bond notes a couple of weeks ago, has resulted in massive capital flight as this has increased uncertainty in business. As if he hasn’t learnt anything from the 2008 crisis, Mangudya is foolishly and arrogantly following the same destructive route followed by his predecessor Gideon Gono.

It is disturbing that Mangudya is failing to realise that his ill – conceived idea has not only caused panic in business but has also forced importers and remittance-senders to the black market. It is abundantly clear that the black market will worsen upon the introduction of the bond notes. Mangudya’s outline of a raft of measures, in all honesty, are only targeted at curing the symptoms and not the root cause of the liquidity crisis. It is also an absurdity for the RBZ Governor to threaten to cancel licenses of financial institutions violating his recently announced measures to curb the cash crisis.

Sadly, Mangudya mistakenly assumes a command economy would rescue Zimbabwe from the impending inevitable economic collapse by issuing senseless threats to banks and the business community. His recent pronouncement of what he termed measures in considering what essentials for preference in the utilization of the scarce US dollars is not only shockingly shallow but it is also devoid of any solid financial sense and support. It defies financial logic how a whole Governor of the Reserve Bank would not decipher that what he listed as causes are mere outcomes that are symptomatic of a hopelessly mismanaged economy.

During the MDC involvement in the short-lived inclusive government, the low levels of production cited in Mangudya’s recent statement, actually shot up to 60%. However, recent economic projections have cited production levels to be as low as 30% under the current Zanu PF’s regime. This is actually half of what was achieved during the period that the MDC was part of the inclusive government.

Mangudya and his handlers in the corrupt Zanu PF regime conveniently appear to be oblivious of the fact that the current low business and consumer confidence coupled with massive cash flight from the banks, is a result of lack of trust of the corrupt Zanu PF regime by the general public and business alike.

The world over, common economic logic dictates that, any financial service system only functions on the basis of trust and if that trust is broken, such manifestation as are happening in our banking and business sector would ensue. It is disturbing that Mangudya would suddenly think that business and the general public would miraculously begin to trust the central bank given their experiences during the quasi – fiscal escapades of Gono in 2008.

Mangudya has got only one option left and that is to resign in order to preserve the little dignity if any, he is left with. Only a wholesale and complete change of government will be able to extricate Zimbabwe from the prevailing financial and socio-economic mayhem.

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