Zimbabwe has appointed a new governor for its central bank, hoping to revive its struggling economy and stabilize its volatile currency.
John Mushayavanhu, a veteran banker with more than 30 years of experience, will take over the helm of the Reserve Bank of Zimbabwe (RBZ) from John Mangudya, whose 10-year term ends on April 30 next year.
Mushayavanhu has worked at various banks, including Standard Chartered Bank and FBC Bank, where he is currently the group chief executive officer.
President Emmerson Mnangagwa’s government announced the appointment in a statement on Friday, saying Mushayavanhu had “demonstrated leadership and innovation in the banking sector”.
Mangudya, who has been widely criticized for his handling of the country’s monetary policy, will become the chief executive officer of the Mutapa Investment Fund, a sovereign wealth fund that was created in 2014 but only became operational this year.
Mangudya presided over rampant inflation, currency devaluation, and chronic shortages of cash, fuel, and electricity in Zimbabwe, which has been grappling with a deepening economic crisis since the ouster of long-time ruler Robert Mugabe in 2017.
Under Mangudya, the RBZ reintroduced the Zimbabwean dollar in 2019, after a decade of using foreign currencies, but failed to curb the black market and restore confidence in the local unit.
The Zimbabwean dollar, which was initially pegged at 1:1 with the US dollar, has since lost more than 90 percent of its value and trades at around 1:400 on the official market and 1:600 on the parallel market.
The RBZ has also been accused of printing money to finance the government’s budget deficit, fuelling inflation, which reached a record high of 837 percent in July 2020, before easing to 55 percent in November 2023.
The RBZ has projected that inflation will fall to single digits by the end of 2024, while the economy is expected to grow by 7.8 percent this year, after contracting by 4.1 percent in 2020.
However, analysts have warned that the growth figures are largely driven by a rebound in the agriculture sector, which benefited from good rains, and do not reflect the reality on the ground, where most people live in poverty and struggle to afford basic goods and services.
Mushayavanhu will face the daunting task of restoring trust in the central bank, stabilizing the exchange rate, curbing inflation, increasing foreign currency reserves, and supporting productive sectors of the economy.
He will also have to deal with the impact of the COVID-19 pandemic, which has hit the country hard, with more than 5,000 deaths and over 200,000 cases reported so far.
Zimbabwe has received 1.8 million doses of vaccines from China, Russia, and India, and aims to vaccinate 10 million people, or about 60 percent of its population, by the end of 2024.
Mushayavanhu’s appointment has been welcomed by some observers, who hope he will bring a fresh perspective and a more pragmatic approach to the central bank.
“He is a seasoned banker who understands the dynamics of the financial sector and the challenges facing the economy,” said Prosper Chitambara, an economist at the Labour and Economic Development Research Institute of Zimbabwe.
“He has a reputation for being a professional and a technocrat, who is not easily influenced by political pressures. He has a chance to make a difference if he is given the autonomy and the support he needs.”
Source: Reuters
