Gono did not want RBZ job


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Central Bank governor Gideon Gono did not want the governor of the Reserve Bank of Zimbabwe post and tried to dodge President Robert Mugabe for six months, according to a cable released by Wikileaks.

“Gono foresaw this Faustian bargain and did all he could to avoid the governorship. After six months of Gono’s bobbing and weaving, Mugabe at last pinned him down,” the cable says.

But after assuming office Gono made the best of his appointment, casting himself as a business wunderkind called in to rescue his country.

This was a fluke as most local businesspeople considered him a ZANU-PF crony who built an empire on sweetheart deals.

Local bankers dismissed his acclaimed turnaround of Commercial Bank of Zimbabwe as smoke-and-mirrors.

 

Full cable:

 

Viewing cable 03HARARE2261, Central Banker Gono: What to Expect

If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs

Reference ID

Created

Released

Classification

Origin

03HARARE2261

2003-11-20 08:19

2011-08-30 01:44

UNCLASSIFIED//FOR OFFICIAL USE ONLY

Embassy Harare

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

 

200819Z Nov 03

UNCLAS SECTION 01 OF 02 HARARE 002261

 

SIPDIS

 

SENSITIVE

 

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR 2037 DIEMOND

TREASURY FOR OREN WYCHE-SHAW

PASS USTR FLORIZELLE LISER

STATE PASS USAID FOR MARJORIE COPSON

 

E. O. 12958: N/A

TAGS: ECON EFIN EINV PGOV ZI

SUBJECT: Central Banker Gono: What to Expect

 

 

1. (SBU) Summary: Gideon Gono’s assiduously-crafted

image as Zimbabwe’s star businessman/negotiator will not

survive his Reserve Bank tenure. The economy he’s about

to steward is a sliver of its former self. Initially, we

expect Gono to quietly advocate market-oriented policies

through his personal relationship with President Mugabe

and penchant for backroom deals. When that fails – as we

believe it will – Gono will face his toughest dilemma,

whether to take his dissent public (like former Finance

Minister Simba Makoni) or cower in private (like the

present Finance Minister Herbert Murerwa and former

Reserve Bank Governor Leonard Tsumba). In the end, he

must sacrifice either his insider privilege or public

repute. End Summary.

 

The Job No One Wanted

———————

2. (SBU) Gono foresaw this Faustian bargain and did all

he could to avoid the Governorship. After six months of

Gono’s bobbing and weaving, Mugabe at last pinned him

down. Since then, the incoming Reserve Bank chief has

made the best of his appointment, casting himself as a

business wunderkind called into service to rescue his

country.

 

3. (SBU) In contrast, most local businesspeople consider

Gono a ZANU-PF crony who built an empire on sweetheart

deals. As the unofficial banker of Mugabe and the ruling

ZANU-PF, Gono has traded low interest (and bad risk)

loans for preferential deals. Local bankers dismiss his

acclaimed turnaround of Commercial Bank of Zimbabwe (CBZ)

as smoke-and-mirrors. Nonetheless, Zimbabwe Broadcasting

Corporation (which he chairs) and Financial Gazette

(which he owns) tout it as Zimbabwe’s Herculean business

feat.

 

Not the Worst Choice

——————–

4. (SBU) Our contacts with Gono lead us to believe he

understands why the GOZ’s interventionist economic policy

is not working, and that only material gain makes

producers produce. Unlike many ZANU-PF hardliners

enthralled by the Cuban “economic miracle,” Gono has

instead pointed to the Malaysia as the model to emulate.

He is also a skilled negotiator who brokered a complex

fuel deal with the Libya’s Tamoil in 2001. It took the

Libyans a year to realize Gono had swindled them into

sending free fuel.

 

5. (SBU) At one point, Gono showed us a “strictly private

and confidential” paper he prepared for Mugabe. It may

give some indication of his slant as central bank chief.

Gono bends over backward to massage Mugabe’s ego and

couch his proposals in the least-threatening manner: “If

any parts or sections of the document are found to be

offensive to anybody or out of line with political and

economic thinking in the Government, I apologize.”

While no reader would mistake Gono’s prescriptions for

those of the IMF, they beat the present policy melange

hands-down. He calls for a more realistic exchange rate,

though the GOZ should still “manage the process and not

leave it to the market.” Gono argues that the GOZ should

stabilize the political environment, grant resettled

farmers title-deed, provide more incentives for exporters

and “get Zimbabwe/UK relations back on course.”

 

Comment

——-

6. (SBU) From what we know of Gono, we believe he will

align with GOZ moderates and push for more commonsensical

economics. But can he succeed where a sharper-witted

administrator like ex-Finance Minister Simba Makoni

failed? The rosiest scenario says maybe, since Gono can

take his case around GOZ hardliners and directly to

Mugabe. Furthermore, he can turn the Financial Gazette

into the Reserve Bank’s publicity organ – a potential

counterweight to Information Minister Jonathan Moyo’s use

of State media.

 

7. (SBU) Unfortunately, we consider it more likely Gono

will back down when confronted by Mugabe and his more

militant ministers. Better than anyone, Gono understands

that GOZ connections made – and can break – his empire.

Bluntly put, we predict Gono will decide it’s better to

be rich than right, falling in line behind other weak-

kneed GOZ malcontents. But conformity to bad policy has

its price: The economy’s continued recession will

finally shatter Gono’s public persona as Zimbabwe’s

turnaround artist.

 

Sullivan

(20 VIEWS)

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

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