Central Banker Report Cards has ranked the Reserve Bank of Zimbabwe’s governor, Dr JP Mangudya as the worst governor in Africa. The report cards have been published since 1994 and are highly regarded around the world. Dr Mangudya got a sad D grade (for 2021 he actually improved to a respectable C-) on his report card which makes him the worst governor among his counterparts. It’s a grade many will say is well deserved given how the governor with the aid of the government has ridden roughshod of all established financial norms, constantly flip-flopped from policy to policy.
The job of a central bank governor, which he holds outside of election cycle & appointed on merit is to ensure money supply & inflation are low. In 3yrs ZWL money supply has increased from $10bn to $417bn. Latest yoy money supply of ZWL is +230%. While Fx rate remains controlled.
Economic commentantor who goes by the monikor Baba Nyenyedzi commenting on the issue.
At every turn, the central bank has refused to take responsibility for its role in fomenting the economic crisis we are seeing and now living through. The most obvious disastrous development is the carefree “money printing” we are seeing as evidenced by the ballooning money supply. The government has cheerfully taken advantage of the RTGS dollar to churn out more invisible money and gone on to blame money changers for skyrocketing rates. This is despite the fact that even state media acknowledges that more often than not beneficiaries of tenders often get paid in RTGS even when they are foreign companies.
They then go on to try to convert that RTGS on the black market in a bid to take that money out of Zimbabwe. When this happens we go through sharp spikes in the black market rate. Most businesses use this black market rate when making pricing and other financial decisions probably because they source most of their foreign currency from the black market. Despite some initial success, the official foreign currency auction has faltered in recent months thanks to the RBZ’s hand weighing heavily on it. Everything is regulated to make sure the rate remains low despite increases in money supply which far outstrip foreign currency inflows. The result has been a dwindling supply of foreign currency facing ballooning local RTGS supplies.
Those companies foolish enough to try to play by the governor’s rules often pay dearly. There is an astounding US$3.5 billion blocked funds bill. More often than not these funds are not being blocked due to some financial regulation rule but rather due to foreign currency shortages. This means that this money cannot flow out of Zimbabwe even when it should. Those who have trusted the official auction have often complained that they end up paying much more than the official rate thanks to delays and interest rates. Despite claims of T2 settlement (i.e. payment after two days) payment is often received weeks later.
Again, that D, a lot of people would say it’s well deserved. Now if he got a C- and he is the worst who is the best in Africa? Well, these are the best central bank governors in Africa:
- Abdellatif Jouahri governor of the bank of Morroco who got an A and made it into the global top 10.
- Tarek Amer of Egypt who got an A- and also got into the global top 10.
- Patrick Njoroge of Kenya who got a B+
- John Rwangombwa of Rwanda B+
- Lesetja Kganyago of South Africa B+. There is another reason why we should join the Rand Monetary Union. The government would probably not like that much given how much they like to print money.
- Ernest Addison Ghana B-
- Florens Luoga of Tanzania B-
- Emmanuel Tumusiime Mutebile Uganda C+
- Yinager Dessie of Ethopia with a C
- Godwin Emefiele of Nigeria with a C
These are all stellar governors who take their jobs seriously, are not pliant political appointees who pander to the whim of the administration even when its detrimental to the economy. Some of their countries have gone through worse political upheavals than ours but are doing much better than us.
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