• 31 July 2009: Gono Indicates He Will Scupper Deal To Officially Adopt The Rand

    Reserve Bank of Zimbabwe Governor, Gideon Gono, seen here with Mugabe at a warehouse where some of foodstuffs and goods from his quasi-fiscal operations were stashed, has come out publicly to defend his role as Monetary Policymaker, setting him on a collision course with Biti yet again.


    Gideon Gono's festive Monetary Policy tradition came to end yesterday. Instead of calling all and sundry (even our advertising agency got an invite) to his Mount to hear the Sermon, he called in only bank industry CEOs this time.

    He is much more restricted now, with the ending of quasi-fiscal activities and therefore can not pronounce policy position on all sorts of areas as he used to.

    One notable thing that came out of his Monetary Statement yesterday was an indication that he and Mugabe are balking at one of the demands from the South Africans for Zimbabwe to join the Rand Monetary Union.

    "Our strong views and preference, however, are that as Zimbabweans, we must have our own currency and autonomy in formulating our fiscal and monetary policies."

    You will recall that in the December 2008 article in which I broke the news of the dollarisation of the Zimbabwe economy, I told you of the South Africans' demand that any adoption of the Rand as requested by Zimbabwe had to result in abandoning the Zimbabwe dollar for at least six months.

    They also demand that Monetary Policy be centrally planned at the SA Reserve Bank and that there be a plan in place for Zimbabwe's government to be self-sufficient. Meaning borrowing from the SA Reserve Bank to fund consumption was out of the question.

    Two weeks ago, Tendai Biti announced during his mid-term Budget Statement that he was inclined to do exactly what Gono now seems to oppose.

    Maybe there is a reason behind that bullet delivered to Minister of Finance's House in an envelope, after all.

    Biti signalled that the Zimbabwe dollar was dead and the government had started thinking of a policy that is (appro) "in line with SADC envisaged goal of a Single Monetary Union by 2018."

    Gono and Mugabe clearly do not want this at all. They want to be able to fund election campaigns with state money from the Central Bank without anyone asking what the money is being withdrawn for.

    They want to continue the buying of loyalty and spreading of patronage on the hunched backs of the overworked, underpaid and overtaxed Zimbabwe people, whose money it is that Gono was so liberal with before, during and after elections.

    Clearly, a fight looms, with Biti arguing for reason and common sense and Gono and Mugabe arguing for self-aggrandisement and patronage.

    As Godfrey Chanetsa, our Interim Chairman at Mavambo says, "This is not a government, it is simple one long negotiating forum, everything they do, every move they make has to be negotiated."

    Nothing can be achieved for the people under the circumstances.


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