NDAMU SANDU
When then Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono said in his maiden monetary policy that some asset managers were “briefcase businesses” and “accidents in waiting”, there was carnage.
The dragnet would spread to the banking sector some months later. Mthuli Ncube was in the United States attending a meeting when monetary authorities swooped on his treasured Barbican Bank and placed it under curatorship. The charge sheet listed deviant behaviour—weak corporate governance, weak capitalisation and insider nonperforming loans—the template to be used on all indigenous banks.
In an interview with a local weekly, Ncube, who had not returned to Zimbabwe following the demise of his empire, said he had not run away and would come back.
“I will come back. It’s just that I’m still shocked and I’m trying to recover. I’m a strong nationalist and there is no way I can run away from my country,” Ncube was quoted as saying.
About 14 years later, Ncube returned to Zimbabwe with a new mandate: turning around the waning fortunes of the economy, battered by years of economic malpractices.
The former chief economist and vice president of the African Development Bank (AfDB) was on Monday sworn in as Finance and Economic Development minister with the unenviable task of putting the economy on a better footing, thanks to years of financial indiscipline.
His predecessors found the going tough as they did not have the latitude to carry out reforms with Simba Makoni and Herbert Murerwa having been fired for singing the reforms hymn. With President Emmerson Mnangagwa preaching of a new economic order, analysts say Ncube’s assignment could be accomplished. Some, before him, were trolled and taunted for applying “bookish economics” to a floundering economy once seen as the beacon of the region.
The banker knows the task ahead and is confident of success. His ability to navigate political minefields would be key in taking Zimbabwe to the proverbial Promised Land.
“It’s enormous. It’s Herculean. I am very energetic and I am definitely up to the task,” he told journalists on Monday.
Fourteen years ago, Gono was the sheriff in town as superintended over the financial sector and to greater extent ministries. Critics said he exercised supra-ministerial roles while others equated him to a de facto premier.
Bankers such as Ncube would shiver upon receiving a call from monetary authorities. Fast forward to 2018 where Gono is retired and can now watch Ncube from the grandstands.
The road ahead is rocky for him and the only score he has to settle is to stabilise the economy. Cash is in short supply and prices are skyrocketing piling pressure on employers who have to cope with new wage demands.
Ncube requires fiscal marksmanship to manoeuvre at a time government’s spending remains unchecked.
In the first half of the year, government’s expenditure was $4 billion as it surpassed the target by $1,5 billion. The budget deficit has been financed by borrowing from the domestic market through the issuance of Treasury Bills.
Ncube said government would work on a roadmap to cut the coat according to the size of the cloth.
“It’s a process. We need a kind of three year process of fiscal consolidation…not a big bang approach,” he said.
Zimbabwe has stagnated over the years with regional peers moving ahead. President Emmerson Mnangagwa dreams of a middle-income economy by 2030. Currently Zimbabwe’s gross income per capita stands at $910 and in 12 years’ time government has to work around the clock to take it to just over $12 000.
Ncube said growth would be predicated on the restoration of confidence, working externally on the arrears clearance front and making sure external investors can be interested in Zimbabwe again. “Coupled with that is building credit lines globally. It has already started with institutions such as CDC showing interest with a $100million facility and that, we need to conclude and make sure that we bring those reserves and credit lines,” he said.
Early this year, UK’s development finance institution, CDC, extended a $100 million facility for Zimbabwe, the first facility Zimbabwe has received from its former coloniser in a very long time.
Ncube dreams of a return of the local currency which was dumped at the inception of the multi-currency regime in 2009. The Zimbabwean dollar was demonetised in 2015.
“Ultimately, we would like to have a Zimbabwean dollar that is stable, that we will have confidence in and we will start working towards that. You will hear in the monetary policy statement the first steps towards that. Building reserves, if we are to have a domestic currency, we need to build reserves and also support output; production in the gold sector: that is part of reserves,” he said.
When Barbican was closed, its assets were amalgamated into Zimbabwe Allied Banking Group alongside the assets of Trust and Royal.
By the time the assets were returned, Ncube had made up his minds and new doors had opened. It was a journey that took him to Wits University, AfDB, Quantum Global Group and Oxford University.
