Zim central bank governor among worst in Africa, SARB’s Kganyago described as ‘bold’

The head of the Reserve Bank of Zimbabwe (RBZ), John Mangudya, has been ranked among the worst central bank governors, according to Global Finance magazine’s ranking, unlike South African Lesetja Kganyago. Photo: Gallo Images/Ziyaad Douglas

  • The head of the Reserve Bank of Zimbabwe, John Mangudya, has been named among the worst central bank governors according to Global Finance magazine
  • The magazine, with input from analysts, economists and financial writers, annually ranks the world’s leading central bankers based on a range of metrics, including the appropriate implementation of monetary policy.
  • SA Reserve Bank Governor Lesetja Kganyago has been described by Global Finance as “bold” in his response to the economic shocks that have characterized the country’s economy.

The head of the Reserve Bank of Zimbabwe (RBZ), John Mangudya, has been ranked among the worst central bank governors, according to Global Finance magazine rankings, in stark contrast to South Africa’s Lesetja Kganyago, who occupies the top spot. rank and has been described as “bold”. central banker.

Zimbabwe has faced sustained monetary and inflationary headwinds, including an uncontrollable exchange rate, liquidity shortages and falling public confidence in the banking sector. Mangudya has not made much progress in tackling the financial chaos that characterizes Zimbabwe’s monetary sector.

Industry, business and manufacturing have also been hammered by the currency mismatches occurring in the economy, business leaders say.

“There is no confidence in the banking sector, inflation remains problematic and the exchange rate is far from the parallel market despite IMF advice for convergence. He cannot be among the best governors with the state of the economy and monetary sector,” a Zimbabwean CEO of a major manufacturing company told Fin24.

Global Finance has given Zimbabwe’s central bank governor a score of C- for 2021, meaning one of the worst scores on the African continent and only below Namibia, Mauritania and Madagascar which have scores of D. In 2020, Mangudya had a D ranking.

The globally respected magazine, with input from analysts, economists and financial writers, annually ranks the world’s leading central bankers on an A to F scale, based on a range of objective and subjective measures, including the appropriate implementation of monetary policy.

According to Oxford Economics Africa, “Headline inflation in Zimbabwe stood at 60.7% year-on-year in December, meaning headline inflation averaged 143% in 2021.”

This illustrates the price hikes Zimbabweans have endured, a trend that has continued into the new year, with life insurance companies raising premiums, schools raising fees and drug prices sharply in increasing pharmacies.

Mangudya has postponed the start of the 2022 foreign exchange auction market to January 18, courting widespread criticism and speculation that Zimbabwe has run out of foreign exchange to allocate local producers. According to central bank data, it allocated about $2 billion to small and large businesses in 2021.

“Apex bank also wants commercial banks to contribute to the recovery by encouraging their clients to invest in government securities. changes to promote financial inclusion,” noted Global Finance in its bulletin for Mangudya.

On Wednesday, Mangudya said he was going after currency manipulators in the pharmaceutical sector and in schools.

The poor performance of the Governor of the Reserve Bank of Zimbabwe contrasts sharply with Kganyago, the Governor of the SA Reserve Bank (SARB) described by Global Finance as “bold” in its response to the economic shocks that have characterized the southern economy. African.

Kganyago is rated A- for 2021 for a man who mobilized the banking sector to keep it strong, liquid and well capitalized “despite bad debt issues and weak” profits. “Five banks continue to dominate, accounting for 90% of assets.”

In November, the SARB raised its rate by 25 basis points to 3.75%, the first time since March a year earlier, a decision Kganyago “argues that if [it] could trigger pain in the short term, in the long term it’s great for the economy”.

The other top-ranked governors in Africa are Egyptian Tarek Amer and Moroccan Abdellatif Jouahri. John Rwangombwa of Rwanda had a B+ rating, while Patrick Njoroge of Kenya received a B grade.

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