Central bank governor Gideon Gono told United States ambassador to Zimbabwe Christopher Dell that everyone hated him except the man on the street.
He was so frustrated that he had tendered his resignation to President Robert Mugabe on February 6, 2006 but Mugabe, the presidium and Didymus Mutasa had persuaded him to stay.
Gono said the ruling elite all “accuse me of carrying the water of the IMF, the white farmers, the Americans; only the man in the street embraces me”.
He said his principal offence was attacking corruption at the highest level.
Corruption in the mining sector was “out of this world”.
He even showed Dell a confidential report on gold that implicated unnamed senior officials in siphoning off production sufficient to reduce official output from 22 tons in 2004 to 12 tons in 2005.
He said he had delivered several seizures of senior officials’ illegal gold – the largest at 65 lbs.- to Minister for Anti-Corruption and for State Security and for Lands Mutasa, who had taken no action.
He estimated that corruption in gold alone was costing at least USD$250 million a year – enough to feed, fuel and medicate the nation for months.
Full cable:
Viewing cable 06HARARE178, GONO ON POLICY FRUSTRATIONS, SUCCESSION TENSIONS,
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S E C R E T SECTION 01 OF 04 HARARE 000178
SIPDIS
SIPDIS
AF/S FOR B. NEULING
NSC FOR SENIOR AFRICA DIRECTOR C. COURVILLE
AFR/SA FOR E. LOKEN
COMMERCE FOR BECKY ERKUL
E.O. 12958: DECL: 12/31/2011
SUBJECT: GONO ON POLICY FRUSTRATIONS, SUCCESSION TENSIONS,
COLLAPSE
REF: (A) HARARE 127 (B) HARARE 98
Classified By: Ambassador Christopher Dell under Section 1.4 b/d
——-
Summary
——-
¶1. (S) In a February 10 meeting with the Ambassador,
Reserve Bank Governor Gideon Gono bemoaned the GOZ’s
unwillingness to address deepening corruption, fiscal
indiscipline and parastatal inefficiencies. Depicting
himself as under seige politically, he said the leadership
had talked him into withdrawing the resignation he
submitted earlier in the week. He conceded that the
country was essentially at a tipping point economically,
and implied that his contradictory GOZ economic policies
were propelling the country toward the precipice — a
precursor to real change. The Governor confided that
Mugabe appeared to be deteriorating mentally and losing his
capacity to balance factional interests. Stressing his
interest in playing a central role in Zimbabwe’s future,
Gono emphasized his independence from ruling party factions
and committed to keep in touch with us as developments
unfolded. End summary.
——————————
Under Seige for Telling Truths
——————————
¶2. (C) In his spacious 22nd floor office atop the
glistening Reserve Bank building, Gono portrayed himself as
a man under attack from all sides for the honesty of his
policy prescriptions. The ruling elite all “accuse me of
carrying the water of the IMF, the white farmers, the
Americans; only the man in the street embraces me,” he
maintained.
¶3. (C) Gono said his principal offense was to boldly
attack corruption at the highest levels publicly and
privately. He cast mining sector corruption as “out of
this world” and showed the Ambassador a confidential report
on gold that implicated senior officials (unnamed) in
siphoning off production sufficient to reduce official
output from 22 tons in 2004 to 12 tons in 2005. He said he
had delivered several seizures of senior officials’ illegal
gold – the largest at 65 lbs. – to Minister for
Anti-Corruption (and for State Security and for Lands)
Mutasa, who had taken no action. He estimated that
corruption in gold alone was costing at least USD 250
million a year – enough to feed, fuel and medicate the
nation for months.
¶4. (C) Gono complained that ag sector corruption continued
unabated despite his high-profile advocacy against it; the
nation’s largest coffee-grower (with 30 percent of national
output) was the latest to be invaded, he reported. The
elite who took farms assumed no liability or risk, each of
which was essentially transferred to the fiscus on the
backs of taxpayers. In sum, corruption was a fundamental
“unfairness” and principal impediment to economic recovery.
¶5. (C) According to Gono, his “Operation Tell the Truth”
was meant to underscore to the party leadership that
high-level corruption was glaringly obvious to the public
and severely damaged the party leadership’s credibility
across the board. He went over a long list of ministers,
governors, senior police/military officials, NGOs, and
private sector players with whom he had consulted and
sought support. Many expressed support and yet key
policies were never carried out.
——————————
Economics Defeated by Politics
——————————
¶6. (C) Further on the economic front, Gono quickly went
down a list of issues, essentially echoing points
elaborated in his recent monetary policy statement (ref
B). The Governor acknowledged the need for moving the
Bank’s quasi-fiscal activities transparently to the budget
as prescribed by the IMF. Political realities, however,
dictated for now that the Bank rush from one patch-up job
to another as the economy continued its downward spiral.
Parastatals represented a fundamental conundrum between
irreconcileable economic and political imperatives. He
reiterated his commitment to refurbish Zimbabwe’s relations
with the IFIs and the international community but conceded
the leadership’s insufficient political will to support his
commitment. Gono concluded that Zimbabwe’s economic
problems were 85 percent political.
———————–
Inflation Tipping Point
———————–
¶7. (C) Regarding inflation – “still public enemy number
one” – Gono said he advised the cabinet not to worry about
how high it would go; they should instead realize that they
would have no country left to rule if the current situation
continued. Referring to Malcolm Gladwell’s book, The
Tipping Point, Gono said his duty was to advise the
leadership that growing hysteria about hyperinflation and
the economy’s irrecoverability could prove to be a tipping
point. (Later, in private, he admitted to the Ambassador
that inflation was actually well above 1000 percent and he
was purposefully suppressing the numbers to “avoid creating
panic.”)
——————–
Resignation Rejected
——————–
¶8. (C) Gono disclosed that his frustrations led him to
submit his resignation February 6. He had spent much of
the week meeting with Mugabe, the presidium, Mutasa and
other cabinet officials, finally being persuaded just the
morning of his meeting with the Ambassador to stay on.
————————————–
Lurching Toward a Post-Mugabe Zimbabwe
————————————–
¶9. (S) In a subsequent 30-minute “four-eyes” exchange
apart from note-takers, the Ambassador observed that Gono’s
often contradictory, even counter-productive, policies and
public blasts against the elite’s misbehavior could be
interpreted as a deliberate attempt to undermine the
leadership’s credibility and hasten economic collapse.
Jumping out of his seat, Gono grabbed the Ambassador’s hand
and exclaimed “This proves you are not na e!” Gono agreed
that ongoing economic and political developments all served
as foundation for a post-Mugabe dispensation that had yet
to be worked out. He observed that economic distress
impelled a perceived need for change but factional
infighting was delaying the succession for which all were
posturing. He said that Mugabe’s wife had confided to him
that the President was “out of it” about 75 percent of the
time and she wanted him to step down.
¶10. (S) What was to follow Mugabe remained murky, Gono
maintained. Mugabe had personally disclosed to Gono his
doubts about Vice-President Joyce Mujuru’s capacity to hold
the country together. Gono confided further that Joyce
herself had recently exploded to Mugabe, complaining about
perceived slights and asserting her independence from her
husband, ex-army chief Solomon “Rex” Mujuru. Full of fear
and loathing, the inner circle was increasingly beyond
Mugabe’s capacity to control: wild-card Mutasa was at odds
with ambitious Emmerson Mnangagwa, who was countering
kingmaker Solomon Mujuru, who didn’t get along with Defense
Forces Chief Chiwenga, etc. Gono cautioned against
assuming anything about individual loyalties in the ruling
party’s opaque factional battles since ethnicity, clan,
totem, personal ambition and old rivalries created a very
complex and crosscutting web of ties. Musing aloud, Gono
said the best solution might be a “junta” that attempted to
balance all these interests in a collective leadership.
¶11. (S) Responding to the Ambassador’s inquiry about
pivotal pragmatic players in a post-Mugabe ZANU-PF, Gono,
speaking sotto voce, mentioned politburo member and
ex-Finance Minister Simba Makoni and Party Chairman John
Nkomo. On a scrap of paper he wrote down “Didymus Mutasa”
and “(Minister of Agriculture) Made” as two players whom he
understood could be allowed no place in a post-Mugabe
government. Gono said he himself remained independent from
party factions – “equally distrusted by all,” he joked –
but communicated with leaders from all factions in both
parties. He emphasized that in any event he wanted to play
a central role in the nation’s social, economic and
political future. At the same time, he stressed that, as a
rags-to-riches self-made man, he had the confidence to
“walk away from it all” if necessary.
¶12. (S) In closing, the Ambassador underscored that
Zimbabwe was without outside help and beyond the point of
being able to engineer its own recovery – a tipping point
in itself. We all knew the only places from which such
support would be forthcoming, but such help would be
predicated on a firm comitment to political and economic
reform. For its part, the USG did not desire Zimbabwe’s
further implosion and stood ready to work with the GOZ,
including a ZANU-PF government, on national recovery – but
only once it was irrevocably on a path to real political
and economic reform. The choice was the ruling party’s:
continue on its self-destructive path and be further
squeezed by the international community, or redirect itself
constructively and receive international support. The
country needed Gono and other pragmatists, despite
political difficulties, to be advocates for and ultimately
deliver meaningful change, the Ambassador concluded. Gono
pexpressed relief at this approach and promised to stay in
touch.
——-
Comment
——-
¶13. (S) “Tipping points” (Gono’s unprompted comments
echoed his remarks to the IMF, ref A) are fast becoming the
fulcrum for political analysis outside and inside the
ruling party in Zimbabwe. Just how close Zimbabwe is to a
tipping point remains unclear but it is undeniably edging
ever closer to the brink. Such discussions helpfully
reinforce the perceived need for change and the imminence
of succession – thus fueling what may become a
self-fulfilling prophecy. Gono himself may well have
concluded that, in view of Mugabe’s refusal to consider
desperately needed change, the shortest path to recovery
(and power for Gideon Gono, of course) is through
collapse. Although this may be a touch conspiratorial, it
does help explain some of Gono’s seemingly “irrational”
policies of the last six months, including the expenditure
of foreign exchange badly needed for critical imports on
repayment of Zimbabwe’s IMF arrears.
DELL
(19 VIEWS)
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