Mugabe picks John Mangudya as Zimbabwe’s new central bank chief

John Mangudya, chief executive of the country’s biggest private bank CBZ Holdings succeeds Gideon Gono whose term ended in November last year.  He will begin work on May1 for a period of five years.  Finance and Economic Development Minister Patrick Chinamasa said Mangudya believes in “discretionary fiscal and monetary policies”.

“Dr Mangudya is a Keynesian economist who believes in discretionary fiscal and monetary policies and in the rational expectations hypothesis,” he said when announcing the appointment.  Mangudya has refused to comment about his appointment saying he needs to first settle down in his new job.

However, Confederation of Zimbabwe Industries (CZI) president Charles Msipa says Mangudya is up to the task.  “His background as an economist and his experience as the CEO of the largest financial services institution in Zimbabwe, he is more than equal to the task,” he said.  Mangudya takes over an Reserve Bank of Zimbabwe (RBZ) hamstrung by debts of more than $1 billion and unable to perform its lender of last resort function due to undercapitalization.

Last November, the government approved the takeover of RBZ’s $1,35 billion debt by government in what was seen as a move to pave the way for the smooth recapitalization of the central bank and repayment of foreign currency account balances taken over during hyperinflation.

RBZ’s domestic debt is estimated to be in the region of $754,3 million while the external debt stands at $596,02 million.  Mangudya once worked as an economist with the RBZ until 1996 when he joined the African Export-Import Bank (Afreximbank) as regional manager in charge of Southern Africa.  He joined CBZ Bank Limited at the turn of the millennium as general manager (international banking).

The group has grown and consolidated its position under his leadership, which advocated FRO what has come to be known as the “One CBZ business model”.  Last week CBZ reported a 4,4% growth in total income to $150,5 million as at 31 December 2013, a rare feat for a Zimbabwean bank.

Copyright The Africa Report 2014