RBZ, fat cats rule the black market

Someone must do the right thing, grab the office keys from the Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, and take him to a job that he actually deserves. Because he looks and acts like a clown, give him that station. That he will lie through his teeth in that new job, as he has always done, won't matter that much.

You see, a public office like the one he is holding is not a theatre for grim amusement. More so when the office involves money. Not just money, but the kind of money that gets a nation swimming or sinking. Money is a funny thing. It can quickly detect clowns and liars pretending to be public office holders. And once it does that, it either rebels, goes to hide in all the wrong places or simply takes the next flight for a more comfortable destination.

Mangudya is almost halfway through his 10-year tenure and, at quite a number of turns, has been caught lying and/or clowning. Too bad that he seems to believe that we are a doting, wide-eyed audience for his funny antics. But it's sheer abuse of office to turn a central bank into a comic theatre.

Two years ago, he put his head on the block as government was ratcheting against all odds to heap bond notes on the economy. He, alongside former Finance minister Patrick Chinamasa, was warned that the bond notes would be a disaster. He had firm faith in the surrogate currency. That is not the problem. In Zimbabwe, there is freedom of conscience.
The problem is that he floated his faith on a bad gamble — to quit his job if the bond notes failed.

You will remember these famous words he uttered two years and two weeks ago: "I have high confidence in this measure we are taking (adoption of bond notes). I know it will bear fruits. In the event the bond notes fail, I will surely resign and walk away from the office and leave someone else to take charge because I would have failed the nation."

The bond notes have not only failed, but dismally so. They haven't enhanced exports as its advocates had claimed they would do. Contrary to initial claims, the majority of the bond notes didn't go to producers to incentivise export trade and boost local currency reserves. Instead, they have been used mostly for small-time consumption. And the bond notes chased away the greenback. When they did that, the forex black market swelled. So, instead of the bond note moving at par with the US dollar, it fell so steeply it's almost on its nose now. No failure comes thicker than this.

But there is another problem here. Mangudya is still lying that the bond note has not failed. It's not clear if he means to also say the surrogate currency is succeeding. Whatever the case, he is giving a big bluff. He thinks he is pulling a clever spin by doing that. He isn't ready to quit his job, so he will insist there is nothing wrong with the bond note, in spite of all the "V11 forms" at hand.

People were ready to shrug him off for telling us that bond notes are not a failure and keep with their sorry lives as they have always done. Until he pulled off another one just recently, claiming that the RBZ was not dabbling on the forex black market. The truth is that Mangudya is a good student of his former boss, Gideon Gono, who he replaced at the central bank.

Gono, you will remember, used to send troops from his office to scoop up the greenback from the black market in his heyday when inflation was running away. Mangudya has been doing the same thing all this while. The difference is that, in the post-election period, he has taken things two or three gears up. Just go to Roadport and ask the hustlers what's happening. They will all tell you that RBZ missionaries are on the prowl. They come with fresh bond notes and buy the US dollar using attractive rates.

The RBZ is probably the biggest buyer of black market greenbacks right now. And it has pushed up demand for the US dollar on the black market. This is understandable. The central bank has close to nothing in its coffers. It must avail money to commerce and the only place to go for real money is the black market.

So there is hyperactivity on the parallel market right now, thanks mostly to the RBZ. When that happens, you know what follows. Rates go up and prices go up. This is what is happening. Because the RBZ is failing to satisfy demand for forex, business is also going to the black market. Since the rates are high, they offload the burden on others, and that is what explains the steep price hikes. In other words, the RBZ is a big driver of the price hikes through its involvement on the black market.

By deploying his officers to the black market, Mangudya is making a practical admission that the bond note has failed. They are having to fork out something like twice the amount of bond notes to buy US dollars.

That shows that the US dollar and the bond note are not at par. So, the next time the governor opens his mouth to defend the bonds must be the last time we should hear him talk as the head of the apex bank. But, of course, we don't mind him hollering as much as he will in his capacity as an official clown.

Central bank officials know all too well that they are not alone in this. Daily, they are rubbing shoulders with the fat cats. These are the greedy opportunists who use their positions of privilege to make a killing from the ongoing economic crisis. The fat cats mostly use proxies who include relatives and errand boys of top government officials.
They get huge sums of bond notes from you know where and take the money to the parallel market. That brings a sense of déjà vu. In those dark days that people thought were past them for good, public officials were caught red-handed at Roadport trading forex on the black market.

Don't get fooled when the cops make sporadic raids on money changers. They have a way of looking away when they should. It has always been like that in this God-forsaken country. The law is enforced selectively. Even with those powerful politicians who were outed back then, nothing happened. Nothing will still happen to the fat cats today, despite all the hullabaloo to stamp out corruption, and no one is making things up here.

It's clear, of course, that Mangudya is not alone in this horrid circus. Just that he tends to yap too much and exposes himself in the process. Ideally, he must just quit his job or get driven out if anyone out there is serious enough to fix the mess.

Tawanda Majoni is the national co-ordinator at Information for Development Trust and can be contacted on tmajoni@idt.org.zw.