The Bits and Bytes editorial team had the golden opportunity of interviewing the Governor of the Reserve Bank of Zimbabwe (RBZ), Dr. John Mangudya during his visit to Africa University. Below is the transcription of the entire interview. The Governor (GV) was interviewed by Rumbidzo Sande (RS) and Jeffrey-Takunda Murungweni (JM). Enjoy.
JM: In your presentation earlier, you said you are developing policies for fintech growth in Zimbabwe. What are some of those policies?
GV: Precisely. We have a Fintech group which is currently being headed by the Deputy Governor of Zimbabwe, Dr Innocent Matshe, who is the chairman of the National Fintech Group in Zimbabwe. In that Fintech group, we do accept proposals from businesses in the market, and we develop them in the incubation sandbox we have. It is in that particular sandbox where people log in their applications for improving Fintech in Zimbabwe.
JM: Thank you for your response. You also mentioned that you were once a Board member of Africa University. In your current position as Governor, what are some of the things you can do to advance the Africa University cause or vision?
GV: There are three things primarily. First of all, we need to be a sustainable University, meaning that we do not need to depend on grants alone. We do need to find some projects. I have once talked about mining here, because on these lands, there is gold and the university can partake in mining. Secondly, we need more students to pay in foreign currency. This means we need to increase the student population, so that we achieve an equilibrium. These funds will then help the school to improve. Lastly, we need to improve student accommodation. If we increase the number of students, we will also increase the level of communication and improve ambience within the university. Currently there are about 1000 students staying on campus, which is about 50% of the entire university. Now imagine if we can raise that to maybe 80%? This will create more and more confidence in the university. But overall I’m happy with the improvements that are happening here. If you happen to compare Africa University and Old Mutare right opposite, you would think you’re in a different country. That just shows the level of work being done here. So it seems things are okay currently, and they can only be enhanced.
RS: As I am a law student, my questions will be law related. Circulating is the rumor that there is soon going to be the abolishment of the dual currency system in Zimbabwe. Are these rumors of the discontinuation of the US Dollar true?
GV: Governors and governance do not entertain rumors. But what is true is that the Reserve Bank and the Government of Zimbabwe knows that we need to instil confidence within this country, and that confidence also comes from the dual currency. For that reason, we are not abolishing the dual currency. What we need to do is to ensure that the fundamentals become right and people use their own local currency without force.
RS: Thank you Governor. My next question is that you emphasized on the fact that the Central Bank is making efforts to tighten the monetary policy. How realistic do you think this is? To what extent do you think this will bring stability considering how we are having a challenge controlling our rates due to the black market rates?
GV: I think we have already made the monetary policy tight enough and there is no more room for maneuver to tighten further. We are going to stay on course in succeeding, because there has been stability since July within the economy. We measure stability by the reduction in inflation. Right now, inflation in US Dollars is negative which shows that we are in deflation. By the way, 83% of our deposits are in foreign currency, and 17% are in Zimbabwean Dollars. If you have deflation in USD, it simply means that aggregate demand is going down and therefore our policies to tighten it have worked. So we are enjoying the fruits of that tightening.
RS: There seems to be an outcry in the health sector. What are some of the budget considerations for the health sector?
GV: In most cases, the health sector should always get a preference because simply put, health is life. Unfortunately resources are limited. We are aware that the allocations for health are not sufficient because of our limited resources. Because of the sanctions due to our land reform act, Zimbabwe does not have access to too much foreign finance which other countries are getting. As a result, we need to use our own local resources which are not sufficient. We therefore need to work with what is there and cut the cloth to our size.
RS: Thank you. My last question is: I was born in 2003. Do you believe that my peers and I will ever see Zimbabwe great again?
GV: Yes, we are indeed getting there. We really do want to make this country great. If someone in 1992 would have been asked to come to learn at Africa University, that person would have thought that you’re mad. Life is all about evolution. A better life is indeed coming. What we just need to focus on is improving our perception of our country and fighting negativity. Thank you.
JM: Thank you so much Governor for this opportunity to interview you. We definitely look forward to more visits from you.