Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya says efforts to reengage international partners and financial institutions have proved futile and a “mirage” that has still left the country isolated.
Speaking to business executives and captains of industry at the CEO Africa Roundtable (COEART) breakfast meeting in Harare, the Central Bank chief said re-engagement was a two way process which had not yielded reciprocal energy from those engaged- despite having achieved the ideal political considerations.
Zimbabwe has been struggling to get international support such as access to credit lines and investment to fix its long-ailing economy despite numerous efforts by government for re-engagement particularly since the second republic came into office in 2017.
“Re-engagement is a two-way process. Even if you go to someone’s house and you ask for salt, if the person don’t want to give you salt they say they don’t have it. So let’s be fair to ourselves and be fair to the country to just say the ideal political consideration constraints that we face as a country, we love to engage whoever in this world but it works two ways,” said Dr Mangudya.
“I was championing the re-engagement process in 2015 when we went to Lima, Peru. We came up with a very good re-engagement process of trying to ensure we engage but you know what, it ended up being something in the air, nothing turned out. It was a mirage. We put all our effort and the realized as I’m speaking today that we are by ourselves Zimbabweans.”
Mangudya’s comments came after veteran economist; Prof. Tony Hawkins had expressed concern over President Emmerson Mnangagwa’s administration’s stance to befriend “bad” allies who includes the likes of China, Russia and Belarus- who are not in good books with the West.
According to Prof. Hawkins, Zimbabwean government’s choice of allies and poor economic policies were major attributing factors to failed efforts of re-engagement.
But Mangudya said he was happy with captains of industry’s resolve to lead in the wake of international isolation which has led to sustained capacity utilization growth levels that are now between 75% and 100% on economic reforms put in place by government to bolster local industry.
“Let’s do things all by ourselves, lets support our industry. Our local production has grown and capacity utilization levels have moved to 75%, some 100 % depending on which company you are looking at. Delta is at 100%,” said Mangudya.
The governor’s latest stance is however in stark contrast with that of his boss-the Minister of Finance, Prof Mthuli Ncube who still insists on re-engagement with the western nations, albeit with limited success so far.
Last year, the Finance Minister embarked on a global road show to Western capitals including New York to win over investors and highlight policy changes in the economy.
Top of the Minister’s agenda was to find suitors for the country’s offshore financial services center –the Victoria Falls Stock Exchange which to date has struggled to gather momentum.
In 2019, President Emmerson Mnangagwa toured Russia, Belarus, Azerbaijan and Kazakhstan and attended the World Economic Forum in Switzerland as part of re-engagement efforts but despite this, investment inflows to the country remain very minimal.
