Zimbabweans big spenders, says Mangudya

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya says the country has big spenders of foreign currency who lack the entrepreneurship to generate export receipts.

Mangudya told guests at a fundraising dinner hosted by Industry and Commerce minister Mike Bimha for his constituency last week that Zimbabweans lacked serious entrepreneurship skills and were failing to harness an estimated 13 million tonnes of gold sitting underground.

"I did a bit of research and came to the conclusion that Zimbabweans lack entrepreneurship, serious entrepreneurship to absorb all the risks as entrepreneurs so that we turn around the fortunes of this economy and all its potential.

"If you have more than 13 million tonnes of gold underground and yet Botswana can survive on diamonds only, it means Zimbabwe, in all earnest, can survive on gold alone," he said.

"I have never seen a country that wants to spend foreign currency without earning it.

"We are good spenders in this country but not very good makers of foreign currency. Whenever you want to spend foreign currency, ask yourself ‘have I made it?'"

Mangudya said there was an assumption that foreign currency was always available since the RBZ had put a list of requirements on the usage of foreign exchange.

The governor's remarks came after Finance minister Patrick Chinamasa said on Wednesday that Zimbabwe had too much dead capital in relation to housing alone.

He said homeowners were not using their houses to borrow money to start businesses and support the economy.

Mangudya said there were several areas from where the country could unlock growth.

The areas included mining, agriculture, and an entrepreneurial culture in the country among others.

"The second part is that we need, as I said, to create entrepreneurship both for the youth and us as people who are in business entrepreneurship," he said.

"We take risks in business. Other people want to spend 20 or 40 years being employed because there is no risk that they are taking but they cannot take a risk of four or five years to get a loan and start a business.

"Four years is shorter than 20 years, but the problem is that people get too comfortable in their comfort zones.

"I think we need to change our mind-sets and talk about entrepreneurship."

Zimbabwe, Mangudya said, was predominantly an agriculture and mining based economy and as such, focus should be put into these two sectors.

"It is not a chicken and egg problem. We need to start with agriculture, we need to start with mining and the money from there goes into industry, so if you invest in just two sectors, it is a great step forward," he said.

Mangudya said the contribution from small to medium enterprises (SMEs) was badly needed as they made a large portion of the economy.

SMEs are estimated to be generating $5 billion in annual revenue.

He said the country had limited access to foreign currency, necessitating the need for renewed focus.

"The new normal right now as a country is where we are by ourselves. Our access to foreign currency is so limited," Mangudya said.

"We have restrictions when we do our foreign payments and we have restrictions when it comes to accessing money from outside.

"That is what has become our normal. We need to work with what is there and produce goods and services with what is there."

He said the country needed to work harder in order to unlock the economy's potential.