By Shephard Majengeta
THE assumption of duty of the new Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mushayavanhu, signals not just a change in leadership but a fresh start for the nation’s economic journey.
As we embark on this new chapter, it is imperative that we rally behind the Governor and his vision for a stable monetary environment.
There is no room for cynicism; instead, let us fully support and embrace the efforts being made to bring about permanent stability in the economy.
At the heart of these efforts lies the latest Monetary Policy Statement (MPS) unveiled by the incoming RBZ Governor.
This policy represents more than just a set of guidelines; it is a blueprint for achieving the ambitious goals set forth in Vision 2030, of transforming Zimbabwe into an upper-middle income economy.
One of the fundamental pillars of Vision 2030 is economic stability.
Without a stable monetary instrument, sustainable development and meaningful progress become elusive. The MPS, with its focus on anchoring the currency and implementing market-determined exchange rates, directly aligns with this goal.
By seeking a more predictable and transparent financial environment, the policy lays the groundwork for sustainable economic growth that will not only enhance local business operations but will make the country more attractive to and boost investor-confidence.
The commitment to ending quasi-fiscal operations is a crucial step towards ensuring fiscal discipline and accountability, a move that not only instils trust in the financial system but also paves the way for efficient resource allocation and economic management, both of which are vital for achieving Vision 2030 objectives.
The MPS also emphasises the promotion of the domestic currency, a key element in reducing reliance on foreign denominations and fostering economic self-sufficiency, directly translating to: Nyika inovakwa nevene vayo/Ilizwe liyakhwa ngabanikazi balo.
Requiring tax payments to be made in the local currency is a strategic measure that not only boosts demand for the domestic currency but also strengthens its role within the economy — we are building the Zimbabwe we want, for us, by us.
This MPS is about achieving stability and having a resilient monetary system that will not be sent into a tailspin by the numerous shocks that have plagued our economy.
The linkage of the new currency to special minerals represents a forward-thinking approach to managing currency stability, the kind of thinking that is required from all of us, critical to efforts of building Zimbabwe brick by brick, stone upon stone.
Linking the new currency to special minerals not only diversifies the currency’s backing but also reduces speculative pressures that have continuously hampered our efforts for sustainable economic growth.
The linkage of the new currency to special minerals aligns with global trends towards asset-backed currencies and positions Zimbabwe’s currency on a more robust footing, essential for achieving Vision 2030’s aspirations.
The determination of the exchange rate through the linkage with the gold price is another critical aspect that dovetails with the vision of an upper-middle income economy; we are effectively leveraging our natural resources in a way that does not only benefit us but future generations as well.
A transparent and market-driven exchange rate mechanism fosters fair competition, attracts foreign investment and promotes international trade — all of which are essential for improving the quality of life of every citizen.
Measures to limit money supply growth and increase demand for local products contribute to a more balanced and sustainable economic ecosystem that is all-inclusive.
By striking a balance between supply and demand dynamics, the RBZ is showing its seriousness to manage inflationary pressures and ensure price stability, key elements in achieving the long-term goals of Vision 2030.
It is crucial to recognise that achieving Vision 2030 requires a concerted effort from all stakeholders — Government, businesses and citizens alike.
The RBZ Governor’s MPS provides a roadmap towards a stable and prosperous future.
By prioritising stability, transparency and sustainable growth, the policy sets the stage for transformative change and positions the country on a trajectory towards becoming an upper-middle income economy.
The MPS represents a significant step forward in aligning Zimbabwe’s economic policies with the aspirations of Vision 2030.
Let us continue working together and wholeheartedly towards a brighter future for Zimbabwe.
