Reserve Bank Gov. Mangudya says the economy of Zimbabwe is an ‘albatross’!

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The Governor Dr. J.P. Mangudya Zimbabwean Reserve Bank writes a special piece on the Zimbabwean economy, not as bleak as the one Finance Minister P.A. Chinamasa wrote in mid-year report of 2016. The Monetary Policy Statement (MPS), of January of 2017, as still evident of the issues in the Zimbabwean economy. With the knowledge of the debt-burden that has arisen together with the suspended international loans, the state funds has funds dwindled. Also, the monetary and fiscal prudence has been weakening as told by the governor of the Reserve Bank. The Governor even called the Zimbabwean Economy an “albatross”, the rest of it says it all.

Zimbabwean economy needs to catch up:

“The positive spin-offs from the recent removal of Zimbabwe from the International Monetary Fund (IMF) remedial measures, following successful clearance of its arrears to the Fund in October 2016, are also expected to go a long way in reducing Zimbabwe’s country risk, thus attracting the much needed foreign investment. Completion of the clearance of external debt arrears to the rest of the international financial institutions – African Development Bank (AfDB), World Bank and European Investment Bank (EIB) – is expected to further reduce the country’s debt burden that continues to be an albatross on Zimbabwe’s access to foreign finance for the past 16 years now at a time when other emerging markets have been making tremendous strides in their economic transformation. As a consequence, Zimbabwe has lagged behind and needs to catch up with its peers” (Mangudya, P: 6-7, 2017).

Reactions to drought:

“In 2016, food imports (maize and wheat), however, surged owing to the El Nino induced drought that destroyed crops in the Southern African region, including Zimbabwe. Continued reliance on imports of finished goods is unsustainable as it undermines current efforts to resuscitate domestic industrial production, leading to significant trade and current account deficits” (Mangudya, P: 15, 2017).

Other key development:

“Driven by merchandise trade developments, the current account deficit is estimated to have narrowed down by about 15.5%, from a deficit of US$1,519.4 million in 2015, to a deficit of US$1,283.9 million in 2016, partly on account of the projected decline in the import bill. Remittances, which are also a major source of import financing declined by 17.9% in 2016, from US$1,917.7 million received in 2015 to US$1,574.0 million in 2016. Of the total amount received in 2016, US$779.0 million reflects remittances from the Diaspora while remittances from International Organizations (NGOs) amounted to US$795.0 million” (Mangudya, P: 16, 2017).

Problematic government loans:

“Reflecting developments on both the current and capital account, the overall balance of payments position is estimated to have deteriorated from a deficit of US$25.8 million in 2015 to a deficit of US$186.4 million in 2016. This phenomenon reflects an unsustainable economic situation of funding capital projects using loans as opposed to equity. The danger with this scenario is that debt would become unsustainable as exports are mortgaged towards debt repayments” (Mangudya, P: 19-20, 2017).

Unbalanced economy:

“The fact that the 14.4% of the country’s foreign receipts handled by RBZ for redistribution into the market seems to have more impact in the economy is a sign of market failure. The Bank shall quickly move to redress this market failure through measures that compel banks to adhere to the import priority list and to mitigate against institutional indiscipline such as the use of more foreign exchange for personal card and DSTV transactions ahead of raw materials to produce cooking oil, for example. Financial institutions should do some soul searching and rethink on how they add value to the economy under the New Normal” (Mangudya, P: 67, 2017).

Bond- Notes introduction:

“The Bank is encouraged by the manner in which the nation embraced bond notes. The Bank has to date issued $94 million of bond notes into the market against an aggregate value of the export incentive of $107 million. Whilst the circulation of the bond notes represented by levels of deposits and withdrawals is also encouraging, the Bank is putting in place a redistributable measure that mitigates against skewed concentration of bond notes within the banking sector by limiting the maximum amount of bond notes that each bank should hold at any given point in time in relation to its level and type of transactions. This measure is necessary to ensure that bonds notes are distributed proportionately according to the customer base or customer profile of each banking institution” (…) “The Bank is directing financial institutions to strictly observe the policy to deposit bond notes into the US$ accounts without requesting the banking public to differentiate between bond notes and US$ cash. This measure is essential to ensure that bond notes continue to trade at parity with the US$ and to reflect the fact that bond notes are supported by the US$200 million offshore facility to support the demand for foreign exchange attributable to bond notes” (Mangudya, P: 67-68, 2017).

When you see this numbers alone, there would be more meat in the report that says lots of the downfalls of the economy. The Governor said the fiscal issues and debt, together with the lacking of imports and exports, the short and less infused funds. With that in mind, instead of pounding on the troubled economy, we should rather enjoy a moment of explanation of why albatross is so dire:

“something or someone you want to be free from because that thing or person is causing you problems” (Cambridge Dictionary) and this one too: “a continuing problem that makes it difficult or impossible to do or achieve something” (Merriam Webster Dictionary). So the Albatross for the Zanu-PF is the economy, even as they eat of it and deplete it. However, the turbulence and insecurity isn’t over as the trust in the Bond-Notes or the other factors as the New Normal isn’t giving. Peace.

Reference:

Dr. J.P. Mangudya – ‘“Stimulating Economic Growth and Bolstering Confidence”’ – Monetary Policy Statement, Reserve Bank of Zimbabwe (RBZ)

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Opinion: NRM works on overtime to delegitimize the FDC though various media, since they are themselves an illegitimated regime!

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There are running battles between the shadows of the Movement and the Forum for Democratic Change has been going on for a while. This has happen as Secretary General Nathan Nandala-Mafabi wrote this in the EALA Nomination letter to the 10th Parliament wrote: “These clearly spell out the positions of the Ruling Party and the Official Opposition Party in the multiparty democracy. In regard to numerical strength. EAC Treaty is also clear on multiparty democracy”.

So now that the FDC is the official opposition party and not the winner of the General Election 2016, even though the rigging master Eng. Dr. Badru M. Kiggundu of the Electoral Commission and the deputy chief justice Stephen Kavuma had to ban the campaign of defiance, that was the Presidential Candidate Dr. Kizza Besigye who run hard against the ruling party and the ruling regime of President Yoweri Kaguta Museveni and his National Resistance Movement.

So with that in context, the months after has been smeared with irregularities and malfunctions as the NRM and their Police has targeted FDC with full force. This they did with detaining members and leaders without court order, house-arrests, blocking of the headquarters and all sorts of other injustices done with an ordinary fashion of contempt of the constitution and law. These have been done as the 10th Parliament was sworn-in and the President was busy having dignitaries from Turkey and South Korea.

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Now that 2017 has arrived and ever since December 2016 the Independent Magazine editor and founder Andrew Mwenda has gone all wild on social media. At the same time TVO has disgraced him and his magazine. The graceful attempts have not been there as the words have addressed each other in fashions that would be in bars and not all in public. So Mwenda are using all tricks with his connections as he even seemingly has traded his popularity and his work ethic for goods from the ruling regime. Because he has gone from being a fierce critic of the Movement and now he defends them.

With this in mind Mwenda has attracted and attacked with more and more staunch words, even as he becoming a laughing stock and a wild-card. Even if he would have pieces of truth, the spin and the propaganda fashion of it all is spoiling facts that might be there. Just like Uganda Media Centre and Hon. Ofwono Opondo spills the beans and defends the Movement with all means. Though his entitled way of sounding more like a NRM Spokesperson than a man who is government spokesperson is showing the transgression of the party itself; just like the NRM inner party election for the EALA done over two days there.

This is still not an issue in nation of Uganda and under the rule President Museveni, which want to be legitimate by every mean possible. Therefore he uses the media and false stories on NTV Uganda where the Party Constitution of FDC is in question. As NTV Uganda wrote yesterday:

A plan to amend the constitution of Uganda’s main opposition party, the Forum for Democratic Change could cause a huge rift among its members if it goes through. The plan is to change clauses in the constitution to allow former FDC leaders another go at the helm of the party. According to the movers, many of FDC’s past leaders have been rendered useless to the party and yet they still have a lot to offer.” (NTV Uganda, 08.02.2017). However, as the story unfolded the FDC leadership debunked the story, Besigye said he would never run as a candidate under that or heard about it. TVO came out saying it was Mwenda who was the source and Hon. Francis Mwijukye wrote this about the farce:

“ Am told that there was a confusing story on NTV last evening about ammending the FDC constitution. Will be hosted on NTV Uganda 8.00 to 8.30am today morning. Let me go and make it clear. I think I was misquoted” (…) ”We were asked about the future of former FDC leaders and party founders. All I said was that I would support an inclusion in the party constitution of a party organ to deal with a council of Elders whose sole role would be to advise where necessary and for institutional memory. There was nothing like allowing former leaders to compete for top FDC positions in the party asked to me. Otherwise I can’t support that amendment” (Mwijukye, 08.02.2017).

When the higher echelons from the FDC are addressing the matter nearly simultaneously with the clip of the story aired, there are clear indications of malpractices in the standard. The NTV surely did this for political purposes. Just as there we’re reports that NTVs Sheila Nduhukire did directly celebrate with the NRM Party when they had done their EALA Primary Elections at the State House. Certainly the media and media houses are getting to close to the ruling regime.

We can just expect that government fuel illegitimate stories in their portrayal to demoralize and legitimize their own existence in power. Because they cannot do it by their own merit anymore, that gravy train left the station long time ago. They will use all means to establish and make the blatant ignorance of Mwenda and use their connections in NTV Uganda to portray the FDC as wolfs or even better wolf in sheep’s clothing.

The NRM and the Movement cannot sell the truth at this point, because that will undress their own existence and their own established fanfare of just cause. The probable cause that has left long time ago, the decades of bribes, thieving and misgivings has now caught up with them. The rigging and ill-forced ways are now what entitles people and therefore EALA elections are ugly instead of silent shows of democratic balloting. The NRM has to use the media and spin to make their biggest threat FDC into a shambolic affair of political charade. Since they have the ability themselves to make itself look unwise.

So the spins and the lies of deception will continue to fluster from the NRM and their media hawks, but still the truth will shine in the end. Peace.

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