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Dr John Mangudya

Cletus Mushanawani Harare Bureau
The economy cannot sustain any salary increments as there is no productivity taking place, says Reserve Bank Governor, Dr John Mangudya.Addressing editors from media houses across the country at the RBZ boardroom on Wednesday, Dr Mangudya said there was no scope in increasing salaries when there was no productivity.

“We need to balance the economy first and increase salaries later. It will be a mistake to increase salaries now because the economy can’t sustain any salary increments. People are just being paid for going to work or for activity and not productivity. Most companies are in a Catch 22 situation because it’s more expensive to fire or retrench a person than to keep him working.

“Our work ethics have gone bad. We need a paradigm shift on our attitude towards work. There is gross indiscipline and we need to change that. Zimbabwe has a high literacy rate, but this isn’t helping us as a country. We should use our education effectively,” said Dr Mangudya.

His comments come at a time when civil servants and most employees are pressing for a salary review citing high cost of living.

Some people argue that Zimbabweans are lowly paid compared to regional neighbours, something Dr Mangudya dismissed saying most civil servants in the region were paid lowly compared to what people in this country were earning.

Turning to the economy, Dr Mangudya said Zimbabwe should invest heavily in three growth areas, which were tourism, mining and horticulture to turnaround the country’s economic fortunes.

Dr Mangudya said Zimbabwe was a giant which was now awakening and there was need to invest more money where there was competitive advantage.

“For the country to move forward, there’s need for rebalancing and resizing of almost every sector of the economy. We need to invest heavily in growth areas like tourism, mining and horticulture. I totally agree with Minister of Tourism and Hospitality Industry, Engineer Walter Mzembi, that Victoria Falls should be the tourism hub of Africa. We should be visionaries. We need to have cable cars in Victoria Falls just like in Cape Town, South Africa and Singapore.

“We need to improve on our exports especially in mining. We can’t continue exporting unprocessed minerals like what’s happening to diamonds. Zimbabweans should benefit from the country’s rich resources. We can do it as a nation than to fold our hands and cry for Direct Foreign Investment. If the investors come, they will simply take our resources and leave us with nothing. Some of the investors don’t bank locally and we’ll continue suffering yet they’ll be developing their own economies and countries,” he said.

Dr Mangudya attributed some of the challenges facing the country to lack of competitiveness.

“We’ve dollarised the economy and this is affecting our competitiveness. The American dollar is appreciating against major currencies and this will make our economy a very expensive one. We’re attracting more imports than exports because it’s proving to be cheaper to import. We’re not producing and we can’t be expected to be competitive,” said Dr Mangudya.

He said mark-ups in business were too high and this would in turn affect the pricing of most goods and basic necessities like water and electricity.

“Most businesses were used to the hyper-inflation era and their mark-ups are very high. We need to change the pricing structures otherwise we’ll continue importing.

“There’s lack of confidence in everything that we do. This also affects business confidence. Lack of confidence breeds poor perceptions. We’ve wrong perceptions, which lead to high country risks. Line of credits will become very expensive because very few investors will want to put their money where there’re high risks,” he said.