By Alois Vinga
THE RESERVE Bank of Zimbabwe (RBZ) says the obtaining economic stability can only be transformed into long term development if the financial sector avails resources for long term development.
Speaking during a virtual conference organised by the Zimbabwe Economics Society (ZES) this week, central bank governor John Mangudya said the obtaining economic stability in the country was strategic pillar for long-term development.
“The pillar of financial sector development strategy or plan is stability. Stability precedes growth and growth requires financial resources. These financial resources come from long-term savings i.e. from pension funds and capital markets, and short deposits from banks,” he said.
“It is against this background that a well-designed strategy can have a great multiplier effect. It crowds in not only domestic resources but also external resources. A more developed financial sector reduces poverty and inequality.”
Mangudya said the motivation for the national financial inclusion strategy will serve as a bridge to the financial sector development strategy.
“The central bank’s strategy, therefore, is to continue to stabilise and rekindle the economy.”
He suggested the idea of bringing together financial sector players like the Securities Exchange of Zimbabwe, Insurance and Pensions Commission and the RBZ to work hand-in-hand for national economic growth.
“We are trying to resolve the inclusivity of financial sector players and put all the savings in one envelope. The strategy is to grow the economy and currently we have a number of financial resources which are disjointed across the sector and all these to be placed on one roof,” he said.
Mangudya also called for the harmonisation of various laws and governance systems to achieve the desired results.
Speaking at the same virtual meeting, Daniel Ndlela, a former economics professor at the University of Zimbabwe slammed backward insurance and pension Laws in Zimbabwe and called for the crafting of a clear financial legislative agenda for the sector.
He also urged authorities to create strong integrated pension schemes which avoid multiplicity or duplicity of roles and responsibilities.