Time for Mangudya to resign
RESERVE Bank of Zimbabwe governor John Mangudya has failed to live up to his words that if his bond notes experiment fails, he would resign.
Bond notes were introduced as a remedy to the country’s perennial cash shortages and boost production, but they have done neither.
The introduction of bond notes was just cosmetic, it was tantamount to treating symptoms with total disregard of the real ailment.
Mangudya should have dealt with the economic fundamentals which are responsible for the problems the country is facing.
Government resorted to printing worthless bond noted to mop up foreign currency on the parallel market to fund its quasi-fiscal activities. As a result, the foreign currency exchange rate and inflation have shot through the roof as did prices.
Government expenditure is unsustainable and unjustifiable and given these circumstances, there is desperate need for Mangudya to go back to the basics.
The country is in a worse off position than it was when Mangudya introduced the surrogate currency. The situation has also been worsened by the COVID-19 pandemic.
The weekly maximum withdrawal of $2 000 can no longer buy anything, while queues for cash still persist.
With people now resorting to e-banking because of COVID-19 restrictions, there is need for Mangudya to scrap the 2% intermediated money transfer tax to give relief to the transacting public.
It will also incentivise the use of e-banking to minimise movement and curb the spread of COVID-19.
If Mangudya is a man of integrity, he should accept that he has failed and walk away and hopefully someone with real solutions can take over from him.