HomeOpinion & AnalysisNew perspectives: Open letter to RBZ governor John Mangudya

New perspectives: Open letter to RBZ governor John Mangudya

I HOPE I find you well and safe in your offices along Samora Machel Avenue.

I am writing this second open letter to you crying for the beloved country you continue to ruin in broad light.

Since you did not respond to my first open letter to you, I have been compelled to write to you again by the multitude of readers who follow this column.

Many readers were anxious to know if you were capable of taking heed of the Turkish proverb I propounded to you: “No matter how far you have travelled down the wrong road, turn back.”

An even larger number demanded that I do an evaluation of the damage caused by your decision to go down the wrong road.

In writing to you openly, I am praying and hoping that your superiors in government and the various parliamentary caucuses will take notice and engage you on these issues.

This is not a letter addressed to the wind, but to people with authority and power to act.

It is now more than a year since you started the “Casino Royale” and it is fair to evaluate what you have achieved or failed to achieve.

l What you started as a journey of “price discovery” has turned out to be a nightmare of a wild goose chase.

The wild goose has moved ahead of you so fast it has virtually disappeared and you can only clutch at the straws, dust and haze in its wake.

The chasm between the official exchange rate and the parallel one has never been as great as it is today and you are further away from discovering the price than you were at the beginning.

l Coins minted at huge national expense have been blown out of circulation by the inflation you have failed to control.

l The $2 and $5 notes are now virtually illegal tender and a source of shame to the generality of citizens and are no longer worth the time of day in counting.

l The biggest unit of the national currency, which should be a source of national pride and which bears the image of a beloved and esteemed national heroine, cannot buy a loaf of bread. It cannot finance a short joyride for two on a Zupco bus.

l You are running about  two months behind in settling the commitments you make at the Casino Royale.

The biggest threat to the country’s stability and economic goals and visions is the wobbling exchange rate you have failed to control because you chose the wrong road to deal with the problem.

Your bosses in the government have shown you more support and trust than you deserve given the clear fact that the road you chose is the wrong one.

They have attempted to assist you by creating a law, SI 127 of May 26,  2021, which gives you teeth to bite offenders who engage in what you have labeled as “practices of indiscipline.”

Needless to say, a confederation of industrialists accosted you agitating for the withdrawal of the law in question.

But your bosses would not budge in supporting you and the law has remained in place.

At this point, I must propound to you another proverb, a Shona one this time, hoping upon hope that you will take heed since it is home grown: Mbudzi inofurira payakasungirirwa (A goat will graze and thrive in the bounds of where it is tied up)

The effect of your law is to remove the little forage that was sustaining the goats (industrialists) in very difficult economic circumstances.

In a well run economy these “practices of indiscipline” are normal arbitrage opportunities which have the effect of closing  gaps of inefficiency in the system to move the market towards perfection.

I did mention in the first letter that you had mastered the “act of washing hands” which you adopted from your fellow governor Pontius Pilate from ancient biblical times when he ordered the crucifixion of Jesus Christ.

Everybody is to blame except you.

It is indeed great showmanship on your part to convince a whole government that the blame lies with these “practices of indiscipline” when the reality of the matter is that you chose the wrong road at the beginning when you created the Casino Royale which you have now clearly failed to manage.

But you have to maneuver to get out of the sticky situation with clean hands by blaming these “practices of indiscipline.”

The Gold Standard with special adaptations is the only way available to you to stabilise and take control of the exchange rate.

This time I will propound the Turkish proverb not just to you, but to your bosses: No matter how far you have travelled down the wrong road, turn back.

Yours Sincerely

Bart Mukucha

  • bart.star-james@gmail.com
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  • 0774447309

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