I must have been out of the loop all these years cause I had no idea ranking finance ministers and central bank bosses was a thing. It does make a lot of sense though. Why do we care so much about who ranks highest when it comes to hitting balls with rackets (Novak) than who shapes entire nations’ futures.
I’m all for it. Also, thinking out loud here, could publicising such rankings have the effect of motivating some heads to try to get the ranking. Probably not cause I don’t believe any head would just be coasting, only to be awakened by ego.
I think most governors and ministers are doing the best they can, working with the skill set they have, within the political situation of their countries. There’s only so much a finance minister in Iraq or Somalia, two of the most corrupt countries, can do to improve his country’s situation.
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And that is assuming he is not corrupt himself, cause if he has a different agenda or toes some party’s line, then the chance to win the Ballon D’Or of central bank governors means little to him. His policies and actions would be decided for him in that case.
So the rankings only serve as clubs with which to clobber those who rank poorly (Mangudya) and soft gloves with which to pat the backs of those who rank high (Ncube.) Not really a productive use of anyone’s time in my opinion.
I know. The irony is not lost on me as I devote time to discuss the rankings.
Minister Mthuli ranks high on some list
The Senegalese Financial Afrik ranked our own Mthuli Ncube in the top five best finance ministers in Africa. I’m not going to sit here and pretend I knew about these guys before this ranking came to light. So, the top five ranking is something, I guess.
I wouldn’t say we have a particularly cordial relationship with the Senegalese for them to stroke our minister’s ego. So they must legitimately believe he ranks that high.
I also would not think Mthuli made some friends during his time with the African Development Bank (AfDB) that are propping up their colleague. Yes, Mthuli worked for the AfDB, which is headquartered in West Africa, and operates across the continent. I imagine the economists who made the ranking knew about him before he took over the Zim finance job.
So, Mthuli probably has a higher profile than his fellow African finance ministers. This could have helped in his case.
Can we trust the objectivity of the rankers?
While I admit I don’t know what Finance Afrik stands for, I would imagine they would not want to tarnish their reputation by publishing a dubious ranking. So, whatever they knew or didn’t know about Mthuli, or whatever relationship they may or may not have with him could only count so much in their decision to rank him that high.
So let’s work with the (probably correct) assumption that the ranking was objectively considered. Our Mthuli is actually the one getting a deduction of marks for sharing this flattering ranking himself. That’s what burner accounts or interns are for, to toot your own horn with no one the wiser. I wonder though, did Mangudya post his worst ranked governor dishonour? Would Mthuli have shared this list if he ranked as poorly as Mangudya?
It’s not a good look to sound your own trumpet in my opinion. However, for motivation and self esteem after a few years in a challenging Zimbabwe, I’d imagine you kind of need to hear the trumpet, even if just once. Get someone we can’t connect to you to sound it for you in that case.
Finance Afrik keeps its marks though. Although I feel it’s important to note that different rankers come up with different lists. Finance Afrik’s list is by no means definitive. TheBanker’s list for example has the Kenyan minister at #1 and yet he didn’t crack the top five of Finance Afrik’s. Rankings are opinions and so they can differ.
That’s important to establish because, let’s be honest, a ranking only carries weight depending on the reputation, knowledge of subject matter and objectivity/independence of the one making the ranking.
So what did these guys we know nothing about look at to come up with their flattering ranking.
What made Mthuli look good?
In 2021, the Zim economy grew by 5.1% according to the World Bank, and 7.8% according to the Zim govt. That was after 2 years of contractions. All that despite the challenges posed by the pandemic.
As we discussed recently, he managed to help rein in the inflation rate which had threatened to spiral out of control in 2020. We closed out 2020 with an annual inflation rate of 349% and ended 2021 at 61%.
Industry capacity utilisation grew from 47.6% in 2020 to 58% in Q3 2021 and is projected to be over 60% for December. (Capacity utilisation represents the production capabilities that are being utilised by the industry.)
Hate or love Mthuli’s tax regime, the extra revenue he collects, especially from the 2% IMTT, helps the govt’s books look good. Mthuli loves reminding us that govt deficits have significantly decreased under his leadership. It’s true. We have posted surpluses in some quarters and that reflects well on him.
The only knock on this otherwise good trend is that it can feel like we post surpluses at the expense of a reasonable wage for civil servants. On the flip side, even Parliament was complaining about not getting all the funds they had been allocated in the budget. So, Mthuli really guards the state coffers’ keys jealously and that’s beautiful. Hence the recognition.
It goes on and on when we look at Keynesian economics metrics that are popular with many economists. Mthuli’s work looks good under this light. You can’t take that away from him.
So, is our weakness in monetary policy?
With Mthuli coming out with flying colours and his partner in crime, Mangudya, flunking the test, what can we conclude? Is it that on the fiscal side of things, Zimbabwe is being led competently and is being let down by a weak monetary policy.
Mangudya’s RBZ is in charge of monetary policy formulation and implementation. However, in practice I’m not sure how much oversight the finance minister has over this function. So, is it fair for Mangudya to bear the brunt of the blame for the monetary mess? Probably but there should be some give and take between the two offices.
I see that even Mthuli has to make some compromises just so we can move forward. I believe he’s not okay with some of the govt spending but cannot do anything about it. How hard is the pressure on Mangudya to act out impulsively like he did with EcoCash? There is probably more hidden pressure to act a certain way on him than there is on Mthuli. It doesn’t excuse him though.
So while I don’t really place significance on awards like the ones we discussed (at least until I win one of course), I also believe that they give us a semi-objective look into how others evaluate our people. So, we’ll make it an annual tradition.