Wednesday, March 13, 2019

Church leaders demand Mangudya apology over bond note disaster

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RBZ Governor John Mangudya
LOCAL church leaders have called on Reserve Bank of Zimbabwe (RBZ) governor John Mangudya to apologise for misleading the nation into false belief the bond note was equal to the US dollar.
This is after the church leaders under the Zimbabwe Council of Churches (ZCC) had met the under fire central bank boss on Sunday to share their views on his Monetary Policy Statement he presented last month.
They said many Zimbabweans have twice lost life-time savings in a space of a decade through hyperinflation.
In their remarks, the church leaders said Mangudya’s recent monetary policy statement did not put forward any measures to preserve the value of bank balance which are in local currency.
When he went against public resistance to introduce bond notes in 2016, Mangudya insisted the surrogate currency was at par with the US dollar and was not going to lose value.
Mangudya has since separated US dollar balances and those denominated in RTGS, an acknowledgement the two were not the same.
Church leaders felt authorities were short-changing citizens.
“The banking public believed that they were holding to US$ accounts over the past 9 years and the true value is lost as the bank balances are now in RTGS dollars,” ZCC said in a statement.
“It is the public’s opinion that bond notes yielded unintended impacts such as parallel market conversion rates that eroded people’s bank balances.
“Thus, the church is concerned by the introduction of the RTGS Dollar as the preferred currency in the context of weak economic fundamentals.
“Public acknowledgement and apology for such failures are important to bring closure to these issues and restore institutional trust.”
The church leaders said they were aware that the new monetary measures were introduced at the time of deepening poverty and unemployment, hunger and malnutrition caused by a system characterised by policy inconsistencies.
They said Mangudya’s measures were generating anxiety in the economy due to high levels of institutional mistrust, non-implementation of pronounced measures.
“Political polarisation, lack of independence of the central bank, ineffective communication, lack of public awareness and lack of stakeholder consultation,” ZCC said.
“We remind the Bank of the economic fundamentals highlighted in 2016 as critical for the return of the local currency.
“These are minimum foreign exchange reserves equivalent to one year of import cover, balanced and sustainable government budget, sustainable interest rates, high consumer and business confidence, sustainable level of inflation and healthy job market.”
The church leaders added, “We are further concerned by the contravention of the Constitution and RBZ Act in relation to contraction of loans and government borrowing from the Reserve Bank of Zimbabwe.
“The Church implores your office, government and all stakeholders to facilitate easy access to foreign currency resources to informal, cross-border and small-scale sectors.
“We are aware that resuscitating the formal economy is complex and will require longer time, thus the informal economy which currently exceed 60% with informal employment above 90% is the anchor of livelihoods in the short and medium term.”
The Church urged RBZ to pursue policies that will recover and transform the economy while rebalancing economic power in the interest of the majority.