Gono did not see eye to eye with Chapfika

Central Bank governor Gideon Gono considered the Ministry of Finance as an adversary and bemoaned deputy Minister David Chapfika’s charges that he was singling out indigenous firms in his anti-corruption campaign.

He also had issues with hardliners within the Zimbabwe African National Union-Patriotic Front such as Agriculture Minister Joseph Made and Information Minister Jonathan Moyo.

The United States embassy said with powers stretching well beyond a conventional central banker, Gono was carving out a powerful niche for himself.

Full cable:

Viewing cable 04HARARE831, RBZ laughs at GOZ crop forecasts

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This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HARARE 000831

SIPDIS

SENSITIVE

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR AMANDA HILLIGAS

TREASURY FOR OREN WYCHE-SHAW

PASS USTR FLORIZELLE LISER

STATE PASS USAID FOR MARJORIE COPSON

¶E. O. 12958: N/A

TAGS: ECON EAID BTIO EINV PGOV PTER ZI

SUBJECT: RBZ laughs at GOZ crop forecasts

¶1. (SBU) Summary: Reserve Bank (RBZ) Governor Gideon Gono

says he has confronted Agriculture Minister Joseph Made

over his optimistic forecast of a 2.4 million m/t maize

harvest. The Governor alleges other cabinet officials,

such as Security Minister Nicolas Goche and acting

Finance Minister Herbert Murerwa, also privately belittle

Made’s stratospheric estimate. On a number of other

issues – rule-of-law violations, school fees increases,

the official Z$824:US$ rate, recent farm acquisitions –

Gono was dismissive of policies favored by Made and other

Zanu-PF hardliners. End Summary.

The GOZ’s voice of reason?

————————–

¶2. (SBU) Ambassador Sullivan called on the RBZ Chief on

May 13, engaging in a far-ranging exchange. As in our

past encounters, Gono betrayed a keen sense of self-

importance, stressing the personal danger he had placed

himself in for taking command of the Zimbabwean economy.

Melodrama aside, Gono is still a voice of relative

sanity, at least by GOZ standards. Covering a host of

topics, Gono:

– laughed out loud at the latest GOZ maize forecast of

2.4 million m/t, drawing on his own farming experience

and exclaiming “no way.” He suggested the RBZ might

issue a dissenting report. Gono also complained Made

halted the United Nations joint Food and Agriculture

Organization/World Food Program survey after the

Minister’s Permanent Secretary had authorized it and was

actually participating in the survey. He judged that the

reason Made was insisting on such a high number was for

Mugabe to trumpet the success of land reform at last

weekend’s SADC summit on agriculture.

– expressed hope the GOZ would still ask the United

Nations Development Program to assist with next year’s

scheduled Parliamentary elections. (When we noted that

the issue reached beyond cost and to the election’s

credibility and legitimacy, he asked for and was provided

the SADC Parliamentary Norms.)

– complained that GOZ rule-of-law transgressions were

undermining his efforts to reengage internationally.

– asserted Trojan Nickel CEO Leonard Chimimba was

assassinated last week before he could meet with Gono and

offer insight into mining sector corruption. Various

press accounts have characterized Chimimba’s death as

part of a carjacking.

– said he was working to restore the validity of Zimbabwe

Investment Center certificates (investment guarantees the

GOZ overlooked in its seizure of many foreign-owned farms

and conservancies). If acted upon, this could bode well

for Amcit investors who have lost properties during land

reform.

– recounted he came to Coca-Cola’s rescue when the

Zimbabwe Revenue Authority insisted on the Coke’s

ingredients for tax purposes. (The Embassy recently

worked with the American Business Association of Zimbabwe

to provide U.S. company reps an intimate audience with

the Governor.)

– lamented the imprisonment of school headmasters over

unapproved fee hikes.

– characterized GOZ reluctance to scrap the Z$824:US$

rate as “psychological” rather than rational.

¶3. (SBU) On economic policy, Gono argued he has markedly

improved the lot of exporters, even while failing to

eliminate 25 percent revenue withholding at the ultra-low

Z$824:US$ rate. Gono said he had come up with a number

of “tricks” to counterbalance the low rate, allowing

exporters easy access to low interest rates and zimdollar

prepayment for export earnings. (Comment: We still see no

evidence of export expansion, but will continue to

monitor. In an event, more export revenue now passes

through official channels.) On the fiscal side, de facto

Finance Minister Gono noted he has fought to hold down

public sector wage increases and other unbudgeted

expenses. He was appalled when the Ministry of

Agriculture’s Agricultural Rural Development Authority

(ARDA) asked him for support after its high-profile

seizure of Kondozi Farm, retorting that “the private

owners never asked for Reserve Bank help.”

Blanket amnesty on the way

————————–

¶4. (SBU) Concerning the RBZ’s anti-corruption campaign,

Gono said he would grant a blanket amnesty for forex

externalization in his next monetary review. He claimed

he was unable to do anything about James Makamba’s

detention since February 9, since he believed the

businessman was being held for personal reasons (a

reference to his rumored affair with Grace Mugabe). Gono

did hope to sponsor an amnesty in his next quarterly

address (apparently estimating that Mugabe might be

willing to let Makamba free by then).

¶5. (SBU) Gono reiterated his interest in visiting

Washington for meetings with the International Monetary

Fund later this month. Ambassador Sullivan warned that

the process for obtaining a waiver to travel (Gono is on

travel ban) normally takes four weeks, if granted. Gono

expressed disappointment but indicated he could postpone

travel. In addition to the Department of Treasury, Gono

expressed an interest in visiting ExImBank.

Gono’s Political Significance

—————————–

¶6. (SBU) It is not clear where Gono falls in among Zanu-

PF factions. He obviously has issues with hardliners

Made and Information Minister Jonathan Moyo. He still

considers the Finance Ministry an adversary and bemoaned

Deputy Minister David Chapfika’s charges that Gono was

singling out indigenous firms in his anti-corruption

campaign. At least to us, Gono has not spoken glowingly

about any top ZANU-PF figure, other than former Finance

Minister Simba Makoni.

¶7. (SBU) With powers stretching well beyond a

conventional central banker, Gono is carving out a

powerful niche for himself. He mentioned he is enlarging

his RBZ oversight committee to 29 members and will

include civil society groups such as the two labor

confederations. In this manner, he could in effect take

over the failed Tripartite Negotiating Forum (TNF), which

the Zimbabwe Confederation of Trade Unions (ZCTU) has

refused to rejoin.

Comment

——-

¶8. (SBU) Probably no GOZ higher-up and Mugabe-confidant

embraces GOZ “enemies” – Western diplomats, the

International Monetary Fund, the Commercial Farmers Union

(CFU) – to the degree Gono does. He boasted that CFU

President Doug Taylor-Freeme, the figurative white farmer

headman, drops by his farm in Mashonaland West to advise

on production. For now, Gono is maneuvering on both

sides of the fence, believing he is the one man who can

bridge the gap. At some point, he may be forced to

choose between Zanu-PF conformity and international

reengagement, but it is certainly in our interest to help

him understand the steps required for international

reengagement.

Sullivan

(48 VIEWS)