The new Governor of the Reserve Bank of Zimbabwe, Dr John Mushayavanhu, assumed office yesterday after his appointment was moved a month earlier amid high expectations for him to hit the ground running and announce policy measures to curtail rising inflation and stabilise the exchange rate.
This effectively means the announcement of the long-awaited Monetary Policy Statement is imminent. It is expected to address key issues related to macro-economic stability.
President Mnangagwa appointed Governor Mushayavanhu in December last year, well in advance of the formal handover from Dr John Mangudya, who was coming to the end of his second and final term. Reserve Bank governors are allowed a maximum of two five-year terms.
Dr Mushayavanhu was scheduled to assume office on May 1.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube confirmed the assumption of office by Dr Mushayavanhu in General Notice 410 of 2024, published yesterday, to pave the way for him to start work. So his five-year term runs to March 27, 2029.
“It is hereby notified that His Excellency the President has, in terms of section 14 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) appointed John Mushayavanhu as the Governor of the Reserve Bank of Zimbabwe for a period of five years beginning on March 28, 2024, and ending on March 27, 2029,” he said.
Dr Mangudya moved to the new Mutapa Investment Fund as chief executive.
Deputy Minister of Finance, Kuda Mnangagwa welcomed the development saying the exchange rate volatility appeared to be linked to the anxiety around the delay in the announcement of the Monetary Policy.
Writing on his X handle (formerly Twitter), he said: “We have been receiving enquiries about the surge in the exchange rate, which right now can be attributed to the anxiety and anticipation of the upcoming Monetary Policy Statement which is around the corner.
“If I were to irresponsibly give unsolicited advice, I would urge Zimbabweans with their hard earned ZWL (Zimbabwean dollars) not to hedge against it.
“Government is committed to ensuring that there will be no loss of value through the introduction of the currency stabilisation measures.”
Economist Mr Persistence Gwanyanya applauded the move, describing Governor Mushayavanhu as a veteran, astute banker and a man of integrity fit for purpose saying.
“I have confidence in the incoming Governor, Dr John Mushayavanhu. Importantly, Dr Mushayavanhu has a good understanding of financial and economic matters that we face as an economy today. He is not coming to RBZ to learn but to carry over from his predecessor, Dr Mangudya.”
Governor Mushayavanhu is coming into RBZ with the full knowledge of the enormity of tasks that lie ahead and Mr Gwanyanya believes the veteran banker is prepared to face the challenge.
Governor Mushayavanhu is assuming the office when mineral prices have fallen and at a time the country is confronted by drought, all of which have far reaching consequences on currency stability.
To this end, Mr Gwanyanya urged everyone to support the new man at the helm of the central bank in his new role, noting the interdependence of the RBZ.
“Stability is our collective responsibility as Zimbabweans. We all have a role to play. I know the Governor will face criticism from pessimists but he should not look back.
“He needs to gather the courage to press ahead with the task at hand with the full knowledge that our challenges are structural, long term and cannot be sorted overnight.”
Mr Gwanyanya said it would be remiss to talk about the incoming Governor without thanking the outgoing Governor, Dr Mangudya for the race run and the fight he fought to get the country to where it was today. “I wish both of them good luck in their new roles,” he said.
Confederation of Zimbabwe Industries president Kurai Mtsheza told The Herald in an interview yesterday, following the announcement of Dr Mushayavanhu’s appointment and commencement of duties, that the priority would be for the new central bank chief to announce the MPS.
“The priority is to announce the monetary policy statement. What it does is, traditionally, it is announced at the beginning of the year and it sets the priorities for the ensuing year so we get guidance from that monetary statement as an economy.
“It is critical that we know the thinking (of policymakers), we deduce a lot of meaning and we tune our businesses to align with that statement,” Mr Matsheza said.
The President appoints the Governor of the Reserve Bank in terms of the Reserve Bank of Zimbabwe Act and the head of the Mutapa Investment Fund in terms of the Sovereign Wealth Fund Act.
He can reappoint a governor once for a second five-year term but at the end of a maximum of 10 years there has to be a new person.
Largely referred to as a shrewd and disciplined banker, Dr Mushayavanhu will have little time to settle in his new position given that he has assumed the reins at a time when the Zimbabwe dollar has been continuously weakening both on the official and parallel markets, driving prices beyond the reach of many.
He is also expected to provide an update on the exact nature and operational modalities of the structured currency announced by President Mnangagwa earlier this year, as one of the interventions authorities are pursuing to bring down inflation and engender stability in the exchange rate.
Dr Mushayavanhu has over 30 years experience in the financial services sector, 26 of them with FBC Holdings, which he has grown during his tenure to be one of the most successful indigenous banks, anchored on a good business model and corporate governance.
Under Dr Mushayavanhu, FBC did not only solidify its position within Zimbabwe but also reached beyond the borders with the establishment of FBC Reinsurance Botswana in 2022, among others.
The acquisition of Standard Chartered Bank Zimbabwe stands testament to the bold and assertive stance the group has embodied — adding another feather to its cap.
One of the biggest strengths of FBCH during Dr Mushayavanhu’s tenure has been the group’s ability to survive in a rapidly changing operating environment, where others failed.
He holds several educational qualifications, including a Master’s Degree in Business Administration and a PhD in Business Administration.
The President recently appointed Dr Mangudya as the chief executive officer of Mutapa Investment Fund, formerly known as the Sovereign Wealth Fund of Zimbabwe.
Mutapa is a State-owned investment fund established from the balance of payment surpluses, official foreign currency operations, the proceeds of privatisation, Government transfer payments, fiscal surpluses and resource earnings. It manages at least 20 parastatals and State-owned entities.
