Zimbabwe's economy not as bad as claimed, says Mangudya

RESERVE Bank of Zimbabwe (RBZ) Governor, John Mangudya has said the country's economy is doing well despite the negative perception among the people.

Giving oral evidence on the performance of the auction system to the Parliamentary Budget and Finance portfolio committee on Monday, Mangudya said the country was not a basket case and urged Zimbabweans to have less bad news.

"The economy's fundamentals are doing well. This economy is not as bad as we paint it. We are not a basket case. Our policies are consistent. Let us have less bad news," Mangudya told committee members.

He explained: "US$3.3 billion has been utilised significantly to expand the economy during the first half of 2022. Most entities have improved, with 30-45% imports compared to our shops, which now have 75-85% local products filled.

"The auction has been able to provide 49% raw materials for the economy's expansion."

Mangudya said the economy's landscape had changed positively, with more capitalisation leading to firms being able to improve on operations.

He, however, admitted this expansion had come with costs such as inflation.

"We are so confident that fundamentals are in position," said the RBZ boss.

"Balance of payment is in place. By the end of June, the country earned US$5.4 billion, an increase of 34% from 2021 figures. Export losses were US$35 million, with a gain of US$790 million diaspora remittances. Prices of commodities have been going up.

"There has been total fiscal consolidation without any borrowing from the central bank by the government. We have a tight monetary policy with an M-Zero static."

The RBZ Chief told the committee that the auction system had a backlog payment to clients of US$75 million, which the bank would clear by the end of July.

"The backlog is there. Last week we cleared SMEs auctions. The main auction 94-99 to become current. Our last auction was 101 and this week we will clear 100 then seal with auctions before 94 by the end of July so that they do not become a moving target. We want to make sure that there is no backlog," Mangudya added.

Harare North MP, Rusty Markham, disputed the backlog of US$75million saying it was around US$300 million.

Markham queried how the government was going to clear this backlog in less than a month when it had failed to do so in six months.

Among the challenges causing economic distress, Mangudya pointed out global inflation, supply constraints brought about by Covid-19, as well as the Russia-Ukraine conflict and the effect of the movement of the exchange and parallel market rate.