Gono says everyone hates him except the man on the street

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

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

TAGS: PGOV PREL ECON EFIN ZI

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

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