Central bank governor Gideon Gono stunned the International Monetary Fund and the United States government when he paid US$120 million on 29 August 2005 towards the country’s IMF debt, leaving both wondering where he had got the money.
The United States thought that the South African government which had been approached for a US$1 billion loan had bailed out Zimbabwe but Pretoria said it was not even aware of the payment.
Gono had the last laugh.
He said he had starved the nation to raise the money which he had only started accumulating since 30 June.
The IMF was not aware of the reserves.
South Africa was not aware of the payment.
Only President Robert Mugabe and two central bank advisors knew about the plan.
Even Finance Minister Herbert Murerwa was not aware of the plan until 29 August when Gono made the payment.
Full cable:
Viewing cable 05PRETORIA3543, SOUTH AFRICA DENIES PAYING ZIMBABWE’S IMF BILL;
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C O N F I D E N T I A L PRETORIA 003543
SIPDIS
DEPT FOR AF/S B. NEULING AND M. TABLER-STONE, EB/IFD, EB/OMA
LONDON, PARIS, BRUSSELS FOR AFRICA WATCHERS
E.O. 12958: DECL: 08/30/2015
TAGS: PREL PHUM ECON KDEM ZI SF
SUBJECT: SOUTH AFRICA DENIES PAYING ZIMBABWE’S IMF BILL;
GONO SAYS GOZ PAID DEBT ITSELF
REF: A. 8/30 NEULING-RIPLEY EMAILS
¶B. PRETORIA 3141 AND PREVIOUS
Classified By: Charge d’Affaires, a.i. Don Teitelbaum
Reasons 1.4(b) and (d)
¶1. (C) Per reftel A, the IMF reported to the USG August 29
that Zimbabwe paid $120 million toward its IMF debt. South
African Department of the Treasury officials that Post
contacted August 30-31 were unaware of any South Africa
payments on behalf of Zimbabwe to the IMF. Zimbabwean
Central Bank Governor Gideon Gono told Strive Masiyiwa (see
bio-note below) August 31 that the Government of Zimbabwe
(GOZ) paid the loan itself without outside assistance. In an
August 31 telcon with PolOff, Masiyiwa said that Gono told
him he had “starved” the nation of fuel and other key items
to accumulate the hard currency. IMF staff were not aware of
the GOZ reserves because they were accumulated only since
June 30. Gono said that South Africa was not aware of the
payment; only President Mugabe, Gono, and two Central Bank
advisors knew of the plan. Even Finance Minister Murerwa was
not aware until late August 29. Gono told Masiyiwa that the
GOZ made the payment as a “matter of national sovereignty.”
Masiyiwa said that Gono was excited and very upbeat about the
news.
¶2. (C) Comment: The payment of a chunk of Zimbabwe’s IMF
debt seems to take the wind out of the sails of the South
African-Zimbabwe loan negotiations (reftel B). While the GOZ
still owes some $170 million to the IMF and desperately needs
food, agricultural inputs, fuel, and electricity, the IMF
payment (and resulting diminishing of expulsion threat)
removes a key SAG leverage point. South Africa may still
make a loan/grant, but may have to abandon its political
conditions. Gono’s story (through Masiyiwa) that the GOZ
paid its own IMF debt is possible, but it also is possible
that other, unspecified parties made contributions that both
they and Zimbabwe want to keep secret. End Comment.
¶3. (C) Bio-Note: Strive Masiyiwa is a Zimbabwean businessman
and Chief Executive Officer of Econet Wireless, an
international telecommunications company. He lives in South
Africa in political exile. While a fierce opponent of the
Mugabe regime and MDC supporter, Masiyiwa remains in contact
with some GOZ officials, including Gono, who was once a
member of his corporate board. End Bio-Note.
TEITELBAUM
(26 VIEWS)
