By Daniel Chigundu
Reserve Bank of Zimbabwe (RBZ) Governor John Mangudya says Finance Minister Mthuli Ncube is misinformed and needs a whole workshop to be schooled on activities of the central bank.
According to Ncube, the RBZ is engaging in too much quasi-fiscal activities and he wants them to be liquidated, however, Mangudya says there are no such activities taking place at the bank adding that it’s just a mere perception.
Appearing before Parliament Portfolio Committee on Public Accounts, Mangudya said there was a need for a workshop to help legislators understand activities of the bank and that Finance Minister must also attend the workshop because he is misinformed.
“Yes definitely he (Mthuli Ncube) needs it, why not? As long as you have no full understanding of activities, what I am saying is that I am not aware of quasi-fiscal transactions done by the bank and I think it’s a definitional issue of what he is saying; the definition which was used could be a wrong definition.
“The minister referred to that in one of his statement, I think he was misinformed on that point because I asked him about it, that minister can you give me three or one which you can touch as a quasi-fiscal activity done by the RBZ, he did not give me and also I don’t know of any,” he said.
The RBZ Governor and his boss the Finance Minister are reportedly at loggerheads on the direction which the economy should take and their feud is also said to have caused delays in presentation of the Monetary Policy Statement.
The governor has however denied the existence of a rift between him and the minister but others say it had to take the intervention of President Emmerson Mnangagwa to bring them to their senses.
Meanwhile, Mangudya has complained that there is too much negative perception about the reserve bank that he sometimes asks himself whether people are intending to destroy or revive the country’s economy.
He said these perceptions are to blame for the lack of confidence in the economy and that they need to be exorcised.
“There is always a perception; we need to exorcise this demon of wrong perception about the central bank, the more you demonise your central bank the more you reduce confidence in the economy and many people don’t know that you should never undermine your own financial service sector.
“Sometimes I don’t know what we want to achieve sometime I ask do you want to destroy this economy or you want the economy of Zimbabwe to survive,” he said.
According to the RBZ boss, quasi-fiscal activities are activities done by central bank or any other enterprise on behalf of the government at below market price adding that when they provide foreign currency to fuel importers or whatever other activities they are doing it rate.
He said quasi-fiscal activities that were done by the RBZ in the previous year were assumed by the government through the Debt Assumption Act, adding that “right now we are not buying generators, we are not giving tractors so don’t confuse, I have also read it in the budget statement.
“We get very disappointed when people try to abuse the central bank by using this type of language that does not exist anymore they were taken by the government through the Debt Assumption Act that’s finished,” he said.