Gideon Gono Printing Fake US Dollars?

Harare, Zimbabwe, 24 September 2009

I was rather shocked today to be told that the MDC's Tendai Biti has decided to launch an investigation into allegations that Gideon Gono of the Reserve Bank of Zimbabwe is printing fake US dollars!

The allegations first surfaced after a man was arrested in Houghton Park, a middle-income suburb of Harare as he attempted to buy goods using the fake foreign currency.

He told the till operators serving him that he believed the money to be genuine because he had got it from someone who works at the Reserve Bank.

In fact, there have been four separate arrests, as far I hear, all of which resulted in the culprit just being let out of the jail with no charges preferred.

Fake US Dollar and South African Rand notes are being presented all over Harare and other cities in Zimbabwe. The upsurge in fake notes has seen almost every denomination of the US dollar and especially the South African R500 (five hundred Rand) being faked and circulated widely.

Zimbabwe now uses foreign currency, a mixture of US dollars and South African Rand as official currency, since killing of its own currency in January in the face of runaway inflation.

To date, although there is evidence that the printing of these fake notes is a professional and organised operation, no significant rings have been smashed and police seem to be struggling to contain it.

Today, I was shown one of the confiscated fake US$100 notes and it was almost a perfect forgery. I took a photo of it and will upload it when I get a chance.

The Reserve Bank of Zimbabwe owes a lot of hard currency to NGOs, businesses and private individuals whose money was "borrowed" without their permission by Gono to fund the elections and also for his quasi-fiscal operations.

Although Gono has produced letters saying that he was ordered to do this, Tendai Biti has been refusing to give him the money he needs to pay those people back. Recently, he suggested that part of the money from the IMF be used to pay back the money he took from people's accounts.

The Bank itself has been struggling to even pay its own workers and Biti eventually had to release US$3 million to fund their operations in his mid-term Fiscal Policy Review.

Sources within the MDC say that the minister has been approached to look into the matter and that he may already have started investigations without informing anyone else.

This is not a new thing in the world in the world, if the allegations are true.

The United States government has previously exposed a mass-printing exercise by the North Korean government, which was printing fake US dollars and using them to buy goods in neighbouring China.

This practise is still going on, although the Chinese and the Japanese are more vigilant now.

I contacted the Reserve Bank, which dismissed the allegations and said these were in the same vein as the allegations of yesteryear, when it was said that the Bank was at the forefront of printing Zimbabwe dollars and buying foreign currency on the black market with them.

Most shops in Zimbabwe now have fake note detecting machines, but the smaller ones and those in the rural areas remain largely exposed, relying on using the shopkeeper's eyes to establish whether the notes are genuine.

All the same, my readers in Zimbabwe should be warned in being more vigilant about examining the money given to them as change or in payment for goods and services. There is no doubt that there is now an upsurge in fake notes circulating, though, considering his position, I doubt Gono would openly sanction the printing of fake notes.

Yet, no one could have believed it if you had told them last year that a banker could withdraw his clients' money without their permission and use it for whatever he saw fit, not sure where he would get the money to pay them back.