Gideon Gono, who at the time was the managing director of the Commercial Bank of Zimbabwe, said President Robert Mugabe sounded him out for a cabinet appointment but he turned it down.
Describing it as “the hardest decision of my life” Gono said he had no political ambitions but wanted to galvanise himself as a corporate turn-around expert.
He had turned around the once insolvent CBZ into the country’s third largest bank and was planning to have it listed on the NASDAQ in New York. Gono, however, had a chequered reputation in the business community.
Gono had won favour with Mugabe for bailing out the country from its fuel crisis. He had arranged several deals to get the country fuel when it was dry.
Full cable:
Viewing cable 00HARARE5397, ZIMBABWE BANK DIRECTOR PROVIDES SOME HOPE FOR
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This record is a partial extract of the original cable. The full text of the original cable is not available.
261404Z Sep 00
CONFIDENTIAL PTQ7155
PAGE 01 HARARE 05397 01 OF 02 261404Z
ACTION EB-00
INFO LOG-00 NP-00 AF-00 ACQ-00 CIAE-00 DODE-00 DOEE-00
DOTE-00 DS-00 FAAE-00 FBIE-00 VC-00 TEDE-00 INR-00
VCE-00 AC-01 NEA-00 NSAE-00 OES-01 ACE-00 IRM-00
SSO-00 SS-00 EPAE-00 DSCC-00 DRL-02 G-00 NFAT-00
SAS-00 /004W
——————89FEB8 261404Z /38
FM AMEMBASSY HARARE
TO SECSTATE WASHDC IMMEDIATE 7190
INFO NSC WASHDC IMMEDIATE
AMEMBASSY KUWAIT IMMEDIATE
DEPT OF TREASURY WASHDC IMMEDIATE
USDOC WASHDC IMMEDIATE
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
C O N F I D E N T I A L SECTION 01 OF 02 HARARE 005397
SIPDIS
NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH
LONDON FOR CHARLES GURNEY
PARIS FOR BISA WILLIAMS
E.O. 12958: DECL: 09/26/05
TAGS: EPET PREL PREL PINR ECON SENV ZI SA
SUBJECT: ZIMBABWE BANK DIRECTOR PROVIDES SOME HOPE FOR
MORE STEADY FUEL SUPPLIES
REFS: A) HARARE 5350 (NOTAL), B) HARARE 4999 (NOTAL)
CONFIDENTIAL
PAGE 02 HARARE 05397 01 OF 02 261404Z
CLASSIFIED BY DCM EARL M. IRVING, REASON 1.5 (B), (D)
¶1. (C) SUMMARY: DCM AND POLOFF CALLED ON GIDEON GONO,
DIRECTOR OF THE COMMERCIAL BANK OF ZIMBABWE (CBZ),
SEPTEMBER 25 TO GET AN UPDATE ON ZIMBABWE’S FUEL
SITUATION. AS REPORTED REF B, THE CBZ, AND GONO
PERSONALLY, HAS BEEN INSTRUMENTAL IN KEEPING FUEL
FLOWING INTO ZIMBABWE UNDER THE MOST ARDUOUS OF
CIRCUMSTANCES. GONO OFFERED SOME HOPE THAT THE FUEL
CRISIS HAS PEAKED, AND THAT THE NATIONAL OIL COMPANY OF
ZIMBABWE (NOCZIM) PARASTATAL THAT HAS CAUSED MUCH OF THE
MISERY WILL LOSE ITS PROCUREMENT MONOPOLY BY THE END OF
THE YEAR. END SUMMARY.
¶2. (C) DCM AND POLOFF CALLED ON GIDEON GONO, MANAGING
DIRECTOR AND CEO OF THE COMMERCIAL BANK OF ZIMBABWE
(CBZ), SEPTEMBER 25 TO GET AN UPDATE ON ZIMBABWE’S FUEL
SITUATION. GONO OUTLINED THE CBZ’S ROLE IN SECURING NEW
SOURCES OF FUEL EARLIER THIS YEAR WHEN ZIMBABWE’S
TRADITIONAL CREDITORS TURNED OFF THE TAPS. WHEN NOCZIM
MISMANAGEMENT AND FOREIGN EXCHANGE SHORTFALLS LED TO
CRITICAL FUEL SHORTAGES IN FEBRUARY, GONO EMBARKED ON A
SERIES OF TRIPS TO LIBYA, EGYPT, DUBAI, AND KUWAIT. THE
FIRST THREE DECLINED TO HELP GONO, BUT KUWAIT’S
INTERNATIONAL PETROLEUM GROUP (IPG) OFFERED SOME HOPE.
GONO ACCOMPANIED PRESIDENT MUGABE AND THEN ENERGY
MINISTER ENOS CHIKOWORE TO KUWAIT IN MARCH, AND IPG SET
UP A US$30 MILLION REVOLVING CREDIT FACILITY FOR FUEL,
ACCORDING TO GONO. AT IPG’S REQUEST, CBZ GUARANTEED THE
DEAL ON A COMMERCIAL BASIS; IN EXCHANGE, NOCZIM
CONFIDENTIAL
PAGE 03 HARARE 05397 01 OF 02 261404Z
DEPOSITED ITS CASH WITH THE CBZ. THE DEAL PROVIDED SOME
TEMPORARY RELIEF TO ZIMBABWE’S FUEL WOES.
¶3. (C) NEW PROBLEMS SOON SURFACED, HOWEVER, WHEN THE
GOVERNMENT’S SPECIAL FUEL BOND WAS ONLY 50 PERCENT
SUBSCRIBED. ZIMBABWE’S FOREIGN FUEL SUPPLIERS BECAME
VERY NERVOUS WHEN THEY SAW THAT NOCZIM COULD NOT
CONVINCE LOCAL BANKS TO BUY THE BONDS. THE FOREIGN
SUPPLIERS STARTED TO PUT THE SQUEEZE ON NOCZIM AND CBZ,
AND FUEL SUPPLIES STARTED TO DWINDLE AGAIN. THE
GOVERNMENT BECAME DISENCHANTED WITH CBZ, AND ENDED ITS
FINANCIAL ADVISORY CONTRACT WITH THE BANK IN JULY. WHEN
THE NEW ENERGY MINISTER, SYDNEY SEKERAMAYI, COULD NOT
FIND NEW FUEL SUPPLIERS FOR NOCZIM, HE SENT AN “S.O.S.”
TO CBZ IN AUGUST, GONO SAID (REF B). THE CBZ CONVINCED
BRITISH PETROLEUM, WHICH HAS THE LARGEST RETAIL NETWORK
IN ZIMBABWE, TO RELEASE FUEL FROM ITS STORAGE FACILITY
IN GWERU. WITHIN TWO WEEKS, GONO HAD EASED THE FUEL
CRISIS AGAIN.
¶4. (C) GONO HAS SINCE INVITED FUEL SUPPLIERS, SUCH AS IPG
AND SOUTH AFRICA’S ENGEN AND SASOL, TO COME MEET MUGABE
PERSONALLY IN AN EFFORT TO RESTORE CONFIDENCE IN
ZIMBABWE. THIS LED TO THE NEW FUEL DEAL REPORTED REF A
BETWEEN NOCZIM, THE ZIMBABWE MINISTRY OF MINES AND
ENERGY, SOUTH AFRICA’S ENGEN (26 PERCENT STAKEHOLDER IN
CBZ, AND ITSELF 80 PERCENT OWNED BY PETRONAS OF
MALAYSIA), CBZ, AND METROPOLITAN BANK. GONO ELABORATED
THAT THE DEAL INVOLVES A US$50 MILLION REVOLVING CREDIT
FACILITY THAT IS TIED TO EXPORT EARNINGS ON SPECIFIC
COMMODITIES, SUCH AS COTTON AND TOBACCO. THE CREDIT
CONFIDENTIAL
PAGE 04 HARARE 05397 01 OF 02 261404Z
SCHEME INCLUDES A $25 MILLION 90-DAY AND A $25 MILLION
360-DAY REVOLVING CREDIT LINE (REF A). CBZ HELPED TO
NEGOTIATE THE 360-DAY FACILITY WITH MALAYSIA DIRECTLY,
AND IT HAS HELPED TO RESTART THE IPG FACILITY, WHICH HAD
BEEN SUSPENDED.
¶5. (C) ON THE FATE OF NOCZIM, GONO STATED THAT IT IS ON
ITS WAY TO BECOMING SOLELY A REGULATING BODY WITH NO
PROCUREMENT AUTHORITY. ACCORDING TO THE GOZ’S CURRENT
THINKING, ZIMBABWE’S FUEL IMPORTERS WOULD HAVE THE
FREEDOM TO BUY FUEL DIRECTLY AT MARKET PRICES AND CUT
OUT THE NOCZIM MIDDLEMAN. THE GOVERNMENT WOULD STILL
HAVE A HAND IN DETERMINING FUEL PRICES, USING THE SOUTH
AFRICAN GOVERNMENT’S FORMULA (NFI) THAT WOULD ENSURE NO
LOSSES TO THE STATE OR SUPPLIERS. NOCZIM’S STAFF IS TO
BE REDUCED FROM 200 TO 15, AND IT IS TO MOVE OUT OF ITS
SEVEN-STORY HEADQUARTERS, GONO STATED. WHEN ASKED HOW
LONG NOCZIM HAD LEFT, GONO FELT THAT IT WOULD BE
EFFECTIVELY DISSOLVED BY THE END OF THE YEAR, BUT NOTED
COYLY THAT THERE WERE STILL POLITICAL OBSTACLES TO
OVERCOME. IN ANY CASE, GONO FELT THAT HE WOULD BE ABLE
TO MAINTAIN THE REPRIEVE FROM ZIMBABWE’S FUEL TROUBLES
FOR AT LEAST THE NEXT THREE TO FOUR MONTHS.
CONFIDENTIAL
CONFIDENTIAL PTQ7156
PAGE 01 HARARE 05397 02 OF 02 261404Z
ACTION EB-00
INFO LOG-00 NP-00 AF-00 ACQ-00 CIAE-00 DODE-00 DOEE-00
DOTE-00 DS-00 FAAE-00 FBIE-00 VC-00 TEDE-00 INR-00
VCE-00 AC-01 NEA-00 NSAE-00 OES-01 ACE-00 SSO-00
SS-00 EPAE-00 DSCC-00 DRL-02 G-00 NFAT-00 SAS-00
/004W
——————89FEC2 261405Z /38
O 261404Z SEP 00
FM AMEMBASSY HARARE
TO SECSTATE WASHDC IMMEDIATE 7191
INFO NSC WASHDC IMMEDIATE
AMEMBASSY KUWAIT IMMEDIATE
DEPT OF TREASURY WASHDC IMMEDIATE
USDOC WASHDC IMMEDIATE
SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
C O N F I D E N T I A L SECTION 02 OF 02 HARARE 005397
SIPDIS
NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH
LONDON FOR CHARLES GURNEY
PARIS FOR BISA WILLIAMS
E.O. 12958: DECL: 09/26/05
TAGS: EPET PREL PREL PINR ECON SENV ZI SA
SUBJECT: ZIMBABWE BANK DIRECTOR PROVIDES SOME HOPE FOR
MORE STEADY FUEL SUPPLIES
CONFIDENTIAL
PAGE 02 HARARE 05397 02 OF 02 261404Z
¶6. (C) COMMENT: GONO WAS MORE CIRCUMSPECT WITH US THAN
IN HIS DINNER CONVERSATION A FEW WEEKS AGO IN WHICH HE
DESCRIBED ENERGY MINISTER SEKERAMAYI SENDING LETTERS TO
NOCZIM REQUESTING A CUT OF ANY NEW FUEL DEAL (REF B).
THIS IS LIKELY THE “POLITICAL OBSTACLE” THAT GONO WAS
REFERRING TO. EVEN IF GOVERNMENT OFFICIALS CONTINUE
SKIMMING OFF OF THE COUNTRY’S FUEL TROUBLES, IT APPEARS
THAT ZIMBABWE HAS SECURED ENOUGH FOREIGN FINANCIAL
BACKING TO TEMPORARILY STAVE OFF THE CONSTANT FUEL
DISRUPTIONS THAT HAVE PLAGUED IT FOR THE LAST TEN
MONTHS. QUEUES AT LOCAL PETROL OUTLETS HAVE BEEN
NOTICEABLY SHORTER SINCE THE SEPTEMBER 22 FUEL DEAL WAS
ANNOUNCED. WHETHER ZIMBABWE HAS FOUND A MORE LASTING
SOLUTION WILL DEPEND ON THE POLITICAL WILL OF MUGABE AND
THE ENERGY MINISTER TO DISSOLVE THE CORRUPT AND BADLY
MANAGED NOCZIM. THAT MAY PROVE DIFFICULT IF THE NEW
ENERGY MINISTER AND OTHERS LIKE HIM CANNOT WEAN
THEMSELVES FROM THE BLOATED PARASTATAL.
¶7. (C) BIO NOTE: GONO WAS BORN IN BUHERA, MANICALAND
PROVINCE, ZIMBABWE ON NOVEMBER 29, 1959. HE IS MARRIED
AND HAS FOUR CHILDREN AGES 18, 16 (TWIN GIRLS), AND 4.
HE DESCRIBES HIMSELF IN HORATIO ALGER TERMS, STARTING
OUT AS A TEA-MAKER/CLEANER AT A LARGE COMPANY, WHO USED
HIS PAYCHECK TO PUT HIMSELF THROUGH SCHOOL FROM GRADE
SCHOOL TO UNIVERSITY. GONO HINTED THAT PRESIDENT MUGABE
RECENTLY SOUNDED HIM OUT FOR A CABINET APPOINTMENT,
WHICH HE TURNED DOWN (“THE HARDEST DECISION OF MY
LIFE”). THE BANK MANAGING DIRECTOR CLAIMS HE HAS NO
POLITICAL AMBITIONS (“YET”) BUT DOES WANT TO GALVANIZE A
REPUTATION AS A CORPORATE TURNAROUND EXPERT, WHICH HE
CONFIDENTIAL
PAGE 03 HARARE 05397 02 OF 02 261404Z
HAS APPLIED TO CBZ, ONCE INSOLVENT BUT NOW ZIMBABWE’S
THIRD-LARGEST BANK. GONO HOPES TO COMPLETELY PRIVATIZE
THE BANK (THE GOZ IS THE 20 PERCENT SILENT SHAREHOLDER)
AND LIST IT ON THE NASDAQ. THE CBZ MANAGING DIRECTOR IS
CLOSE TO PRESIDENT MUGABE AND HAS A CHECKERED REPUTATION
IN THE BUSINESS COMMUNITY. END COMMENT.
MCDONALD
CONFIDENTIAL
>
(29 VIEWS)
