New RBZ chief urges discipline

HARARE - Newly appointed Reserve Bank of Zimbabwe (RBZ) governor John Mangudya has called for fiscal discipline and a balance between indigenisation and need to attract foreign investment.

In his maiden speech, the central bank chief – who assumed office on May 1 – said Zimbabwe must have "discipline enough to find an equilibrium position or a point of harmony between the need to promote indigenisation and the need for foreign direct investment and the ability to synchronise the two”.

This comes as his predecessor Gideon Gono called for a cautious approach in implementing the indigenisation law – compelling foreigners to cede majority shareholding to black Zimbabweans – particularly in the banking sector.

The former CBZ Holdings chief executive pledged to stick to the RBZ’s mandate, at a time Zimbabwe faces a severe liquidity crisis and a fragile banking sector, among other challenges. 

He said there is need to refrain “from living beyond our means, as this would bring greed and corruption,” adding that Zimbabwe must have “discipline to utilise our resources efficiently…discipline to know that we need to increase production before we increase consumption.”

Mangudya said “we need to work very hard for this economy”.

His call comes as government’s expenditure has been ballooning in the face of dwindling revenue collections.

The economy is showing signs of strain, reflected by low aggregate demand, a widening trade deficit, growing banking sector vulnerabilities and low industry capacity utilisation.

Comments (3)

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