Monetary Policy set for early February

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Dr Mangudya

Happiness Zengeni In Davos, Switzerland
The Reserve Bank of Zimbabwe is set to deliver the 2018 Monetary Policy Statement (MPS) early in February after central bank Governor Dr John Mangudya returns from from the country’s historic trip to Davos.

Dr Mangudya, who is part of President Emmerson Mnangagwa’s strong delegation at the 48th World Economic Forum annual meetings, said he is concluding the MPS with plans to deliver it by the end of the first week of February.

“The MPS as we know is around end of January, but I am here. I am also working on it so that at the end of the day within a week from end of January it will be out,” Dr Mangudya yesterday told The Business Weekly in an interview in Davos, adding: “So let’s work with first week of February; if there are any changes we will advise but we don’t intend to change.”

Dr John Mangudya faces the Herculean task of living up to expectations when he delivers his MPS given that it comes hard on the heels of leadership change in Zimbabwe and emphasis on international re-engagement with priority on economics.

Speaking about the Davos Trip, Dr Mangudya said Zimbabwe’s agenda at the event is to show the world that it is open for business.

He said the country wants investors in all sectors of the economy including agriculture, tourism and mining in order to improve the economic landscape.

“In doing so we are also ensuring that we escalate and move vigorously on the re-engagement which entails clearance of our arrears to the multilateral institutions and after that as you know we need to clear the arrears of the Paris Club as well and generally improve the international relations between Zimbabwe and the rest of the world,” Dr Mangudya said.

“The best way of doing it therefore is to exchange ideas at critical and important forum like the WEF. Most of the institutions and leaders will be at the meeting and so far we are happy with the reception we have received. We have discussed with the relevant parties to this equation of improving the ease of doing business.”

The central bank chief said President Mnangagwa’s administration has hit the ground running to improve the investment climate and make the country more attractive to foreign investment.

“The Zimbabwean situation is very simple and the shortage of foreign currency indicates the demand for foreign exchange is higher than the supply and that equation can be resolved by increasing FDI (foreign direct investment), improving lines of credit and nostro stabilisation. Once you do that you know that when money comes to Zimbabwe it now stays,” he said.

“Without a good economic landscape you know that money will just flow out of Zimbabwe. So definitely when you open up the economy you make sure there is retention of money that comes into the system.”

Dr Mangudya said Government is inviting large global corporates to set up operations in Zimbabwe in order to create jobs and earn foreign currency for the economy through exports.

He said foreign investors are guaranteed repatriation of their dividends through direct support from the central bank under the nostro stabilisation facility.

“For example if you talk about tobacco, Zimbabwe is a big tobacco producing country so we are saying the big companies that manufacture cigarettes can come to set up their crop in Zimbabwe and their manufacturing plant in Zimbabwe and then by so doing you bring capital.

“In the meantime we are making sure we move on the nostro stabilisation facility to give confidence and assurances to those foreign investors who have money in Zimbabwe so that we help them to remit out of the country.”

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