• Tue. Apr 23rd, 2024

Who is the Next Apex Bank Chief After Mangudya?

ByEconomic Times

Mar 13, 2023

By ETimes

The governor of the Bank Zimbabwe (RBZ), Dr. John Panonetsa Mangudya’s tenure as the chief at the apex is expected to end in May 2024. Many political scientists, economists and financial experts are debating on who is likely to take over the reins should Mangudya retire in December 2023 or May 2024.

Some of them have argued that John Mushayavanhu, the Chief Executive Officer (CEO) at FBC Holdings, is likely to be the next governor at RBZ when Mangudya goes. Others have suggested that Dr. Blessing Mudavanhu, CBZ Holdings CEO is the heir apparent because historically CBZ Holdings has served as some kind of breeding ground for central bank governors over the years. In addition, the government’s perceived control or ownership of the financial institution makes Mudavanhu an ideal choice.

However, it can be argued that the complexity of contemporary Zimbabwean politics and economics makes it difficult to predict the next RBZ governor. This is especially true in a country where few have been able to read or understand the political and economic dynamics since 2014. Still, there are a few things about the job that readers should be aware of and one of these is the factor that the governorship of the RBZ is a political appointment.

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This means one is not appointed based on merit but on his/her loyalty and allegiance to the governing party and its principal. This is a major factor that determines who gets this lucrative post when Mangudya departs. In other words, an apparent heir to the throne has to be “politically correct”.

To illustrate this point, one might have to look back at the particular case of Dr. Khuphikile Mlambo, who was the Deputy Governor and chief advisor to Gono. It has been postulated that Mlambo became deputy governor after being strongly recommended by the then Finance Minister, Tendai Biti (2009 – 2013). However, when Gono retired in 2013, it was difficult for Robert Mugabe’s administration to appoint Mlambo as the new governor after Gono’s retirement in December 2013 due to the mistrust between the Movement for Democratic Change (MDC) and ZANU-PF.

It is, therefore, very clear that once a person associates or gains the trust of an opponent as it stands in Zimbabwe, the ruling administration would disregard that person in spite of his/her excellent credentials meaning that the person should be “politically correct.”

It is all about whom you know in the echelons of power. One’s specialized knowledge, expertise, skills and experience in banking and finance are mainly seen as an added advantage. To those with long memories, according to the late Dr Alex Magaisa, Morgan Tsvangirai wanted Professor Mthuli Ncube to be a governor of the apex bank, if he was presented with an opportunity to be the President of the Republic of Zimbabwe. Tsvangirai believed that Professor Ncube, now Finance and Economic Development Minister, had a cutting-edge over Gono as he was more academically and professionally experienced, highly skilled and experienced in all facets of financial economics related to risk management, banking and investment management, but, Mugabe shut the door on him.

Another important factor worth considering is that Zimbabwe is in election mode and traditionally this makes the job of predicting the country’s next central bank governor even more difficult. As it stands now, the upcoming harmonized elections in August 2023 could potentially usher in a Nelson Chamisa-led government or retain the administration of the incumbent President, Emmerson Mnangagwa. With this in regards, it is generally unpredictable to know who’s the next Governor at RBZ after the retirement of Mangudya because politics is the biggest determinant of nomination or influencing appointment of the apex bank chief.

It should also be said that reading the mood of President Mnangagwa is no easy task largely because he, unlike his predecessor Robert Mugabe, is not an extrovert. Ambivalent or introverted leaders, like Mnangagwa, cannot be easily studied and have their ways deciphered. Such smart politics as well as the governance style of introverted or ambivalent leaders like President Mnangagwa often keeps everyone guessing.

Further, in the past the government used to have a controlling stake in CBZ Holdings through RBZ, and this made it easier for anyone to guess who was the next apex bank chief – if the incumbent governor retires. Today, it is unpredictable because the government is no longer having a controlling stake in the largest banking and financial institution, CBZ Holdings, as it stands right now.

Lastly and importantly; as it has been aforementioned in this article, the nomination or appointment of the apex bank chief is influenced by the politics of the day. The next governor of the RBZ is going to be strongly recommended by the Central Intelligence Organisation (CIO), which headshunts prospective candidates and submits their names before the presidency.

Such methodology of allowing the CIO to influence the presidency to have the nomination of a loyal person to the system is not all bad, however, the challenge is here that we have a de jure one-party state staying in power for too long, forty-three years of governing the country. In this circumstance, the system in CIO and other government ranks ends up being contaminated by partisan politics. Because of this, the person who qualifies to be next governor of the central bank is not appointed on a merit basis centred on knowledge, skills and experience, but, he/she is appointed on partisan lines since politics of patronage dominates the public governance system in the country.

In summary, looking at the dynamics of politics and governance culture; it is not clear who is the next person to be in charge of formulating and implementing monetary and financial policy processes. Unless, there is paradigm shift from patronage system to de-polarization, where the systems would technically allow in-breeding of apex bank chiefs or headhunt for gifted and talented financial economics not only known to be friends and connections of the governing elitists but the eminent persons known in the public domain as experts of economics and finance. This will, therefore, make it easy to identify the next apex bank chief not as it stands right now – Harare

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