Central bank governor Gideon Gono said he was prepared to interfere in any sector for the sake of Zimbabwe’s economic health.
This was generally interpreted to mean selectively chasing down corruption. He appeared to be turning from the financial to the insurance sector.
He said the central bank would continue to allow anyone to sell foreign exchange through authorised banks at the auction rate but would investigate sales of US$10 000 or more.
Gono expressed fear that exporters would under-invoice clients abroad to dodge Zimbabwe’s 25 percent retention requirement, then exchange proceeds in anonymous cash transactions.
He continued to pin hopes on tapping into transfers from Zimbabweans abroad; claiming that one-third of the population had emigrated.
He said that foreign exchange redemptions were about US$1.5 million per day in the first days of the no-questions-asked policy.
Viewing cable 04HARARE767, RBZ Governor Addresses U.S. Firms
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS HARARE 000767
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
SUBJECT: RBZ Governor Addresses U.S. Firms
Ref: Harare 682
¶1. (U) Summary: Reserve Bank (RBZ) Governor Gideon Gono
met May 6 with 30 representatives from U.S.
multinationals. He offered few insights beyond his April
21 policy statement, but underscored RBZ vigilance in
policing commercial activity. End Summary.
¶2. (U) In this session organized by the American Business
Association of Zimbabwe, Gono said the following to U.S.
– He will need to make more frequent policy statements
than the two-per-year that had become typical under his
predecessor. (April’s address followed his first by only
– Gono is prepared to interfere in any sector for the
sake of Zimbabwe’s economic health. This generally means
selectively chasing down corruption. He appears to be
turning from the financial to insurance sector.
– The RBZ will continue to allow anyone to sell foreign
exchange through authorized banks at the auction (or
floor) rate. However, the RBZ will investigate sales of
US$10,000 or more. Gono expressed fear exporters would
under-invoice clients abroad to dodge Zimbabwe’s 25
percent retention requirement, then exchange proceeds in
anonymous cash transactions. The governor also raised
concerns about money laundering to finance terror or
other nefarious activity.
– Gono continues to pin hopes on tapping into transfers
from Zimbabweans abroad, claiming one-third of the
population has emigrated. He stated that foreign
exchange redemptions were about US$1.5 million per day in
the first days of the no-questions-asked policy.
– Once forex inflows improve, Gono would like to offer
more than US$8 million at twice-weekly auctions. For the
time-being, the RBZ would continue to direct “inflows to
– The RBZ governor reiterated his desire to restore
relations with the international community, especially
the International Monetary Fund. He expressed gratitude
for U.S. food and HIV/AIDS assistance.
– He praised the African Growth and Opportunity Act
(AGOA), explaining he had been following AGOA since its
embryonic beginnings in 1997. (Note: In recent months,
Post has made a concerted effort to raise the profile of
AGOA, making Zimbabweans aware of what they are missing
¶3. (SBU) In private conversations with the Ambassador,
Gono claimed not to know of the GOZ cabinet decision two
days prior to cancel an FAO crop assessment and said that
he knew the likely maize crop was closer to 800,000
metric tones than the 1.7 million claimed by the
Agriculture Minister. He also padded his reputation as
all-purpose fix-it man by claiming to have intervened
successfully against the Ministry of Education’s shutdown
of many private schools due to unapproved fee hikes.
Further, he said he was considering an appeal by Vice
President Msika to secure presidential intervention
against the Government’s seizure of Kondozi Farm (ref).
¶4. (U) The GOZ is still fighting market forces,
particularly on currency exchange. Unwilling to face
market realities, it shut several dozen private schools
this week over increased fees. The GOZ’s predisposition
to dictate rates and prices to the private sector still
makes an economic rebound unlikely.