Gono says he turned down a cabinet job


0

Gideon Gono, who at the time was the managing director of the Commercial Bank of Zimbabwe, said President Robert Mugabe sounded him out for a cabinet appointment but he turned it down.

Describing it as “the hardest decision of my life” Gono said he had no political ambitions but wanted to galvanise himself as a corporate turn-around expert.

He had turned around the once insolvent CBZ into the country’s third largest bank and was planning to have it listed on the NASDAQ in New York. Gono, however, had a chequered reputation in the business community.

Gono had won favour with Mugabe for bailing out the country from its fuel crisis. He had arranged several deals to get the country fuel when it was dry.

 

Full cable:


Viewing cable 00HARARE5397, ZIMBABWE BANK DIRECTOR PROVIDES SOME HOPE FOR

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

00HARARE5397

2000-09-26 14:04

2011-08-30 01:44

CONFIDENTIAL

Embassy Harare

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

 

261404Z Sep 00

 

 

CONFIDENTIAL     PTQ7155

 

PAGE 01       HARARE 05397 01 OF 02 261404Z

ACTION EB-00

 

INFO LOG-00   NP-00   AF-00   ACQ-00   CIAE-00 DODE-00 DOEE-00

DOTE-00 DS-00   FAAE-00 FBIE-00 VC-00   TEDE-00 INR-00

VCE-00   AC-01   NEA-00   NSAE-00 OES-01   ACE-00   IRM-00

SSO-00   SS-00   EPAE-00 DSCC-00 DRL-02   G-00     NFAT-00

SAS-00     /004W

——————89FEB8 261404Z /38

FM AMEMBASSY HARARE

TO SECSTATE WASHDC IMMEDIATE 7190

INFO NSC WASHDC IMMEDIATE

AMEMBASSY KUWAIT IMMEDIATE

DEPT OF TREASURY WASHDC IMMEDIATE

USDOC WASHDC IMMEDIATE

SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 005397

 

SIPDIS

 

NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH

LONDON FOR CHARLES GURNEY

PARIS FOR BISA WILLIAMS

 

E.O. 12958: DECL: 09/26/05

TAGS: EPET PREL PREL PINR ECON SENV ZI SA

SUBJECT: ZIMBABWE BANK DIRECTOR PROVIDES SOME HOPE FOR

MORE STEADY FUEL SUPPLIES

 

REFS: A) HARARE 5350 (NOTAL), B) HARARE 4999 (NOTAL)

 

CONFIDENTIAL

 

PAGE 02       HARARE 05397 01 OF 02 261404Z

 

CLASSIFIED BY DCM EARL M. IRVING, REASON 1.5 (B), (D)

 

1. (C) SUMMARY: DCM AND POLOFF CALLED ON GIDEON GONO,

DIRECTOR OF THE COMMERCIAL BANK OF ZIMBABWE (CBZ),

SEPTEMBER 25 TO GET AN UPDATE ON ZIMBABWE’S FUEL

SITUATION. AS REPORTED REF B, THE CBZ, AND GONO

PERSONALLY, HAS BEEN INSTRUMENTAL IN KEEPING FUEL

FLOWING INTO ZIMBABWE UNDER THE MOST ARDUOUS OF

CIRCUMSTANCES. GONO OFFERED SOME HOPE THAT THE FUEL

CRISIS HAS PEAKED, AND THAT THE NATIONAL OIL COMPANY OF

ZIMBABWE (NOCZIM) PARASTATAL THAT HAS CAUSED MUCH OF THE

MISERY WILL LOSE ITS PROCUREMENT MONOPOLY BY THE END OF

THE YEAR. END SUMMARY.

 

2. (C) DCM AND POLOFF CALLED ON GIDEON GONO, MANAGING

DIRECTOR AND CEO OF THE COMMERCIAL BANK OF ZIMBABWE

(CBZ), SEPTEMBER 25 TO GET AN UPDATE ON ZIMBABWE’S FUEL

SITUATION. GONO OUTLINED THE CBZ’S ROLE IN SECURING NEW

SOURCES OF FUEL EARLIER THIS YEAR WHEN ZIMBABWE’S

TRADITIONAL CREDITORS TURNED OFF THE TAPS. WHEN NOCZIM

MISMANAGEMENT AND FOREIGN EXCHANGE SHORTFALLS LED TO

CRITICAL FUEL SHORTAGES IN FEBRUARY, GONO EMBARKED ON A

SERIES OF TRIPS TO LIBYA, EGYPT, DUBAI, AND KUWAIT. THE

FIRST THREE DECLINED TO HELP GONO, BUT KUWAIT’S

INTERNATIONAL PETROLEUM GROUP (IPG) OFFERED SOME HOPE.

GONO ACCOMPANIED PRESIDENT MUGABE AND THEN ENERGY

MINISTER ENOS CHIKOWORE TO KUWAIT IN MARCH, AND IPG SET

UP A US$30 MILLION REVOLVING CREDIT FACILITY FOR FUEL,

ACCORDING TO GONO. AT IPG’S REQUEST, CBZ GUARANTEED THE

DEAL ON A COMMERCIAL BASIS; IN EXCHANGE, NOCZIM

CONFIDENTIAL

 

PAGE 03       HARARE 05397 01 OF 02 261404Z

DEPOSITED ITS CASH WITH THE CBZ. THE DEAL PROVIDED SOME

TEMPORARY RELIEF TO ZIMBABWE’S FUEL WOES.

 

3. (C) NEW PROBLEMS SOON SURFACED, HOWEVER, WHEN THE

GOVERNMENT’S SPECIAL FUEL BOND WAS ONLY 50 PERCENT

SUBSCRIBED. ZIMBABWE’S FOREIGN FUEL SUPPLIERS BECAME

VERY NERVOUS WHEN THEY SAW THAT NOCZIM COULD NOT

CONVINCE LOCAL BANKS TO BUY THE BONDS. THE FOREIGN

SUPPLIERS STARTED TO PUT THE SQUEEZE ON NOCZIM AND CBZ,

AND FUEL SUPPLIES STARTED TO DWINDLE AGAIN. THE

GOVERNMENT BECAME DISENCHANTED WITH CBZ, AND ENDED ITS

FINANCIAL ADVISORY CONTRACT WITH THE BANK IN JULY. WHEN

THE NEW ENERGY MINISTER, SYDNEY SEKERAMAYI, COULD NOT

FIND NEW FUEL SUPPLIERS FOR NOCZIM, HE SENT AN “S.O.S.”

TO CBZ IN AUGUST, GONO SAID (REF B). THE CBZ CONVINCED

BRITISH PETROLEUM, WHICH HAS THE LARGEST RETAIL NETWORK

IN ZIMBABWE, TO RELEASE FUEL FROM ITS STORAGE FACILITY

IN GWERU. WITHIN TWO WEEKS, GONO HAD EASED THE FUEL

CRISIS AGAIN.

 

4. (C) GONO HAS SINCE INVITED FUEL SUPPLIERS, SUCH AS IPG

AND SOUTH AFRICA’S ENGEN AND SASOL, TO COME MEET MUGABE

PERSONALLY IN AN EFFORT TO RESTORE CONFIDENCE IN

ZIMBABWE. THIS LED TO THE NEW FUEL DEAL REPORTED REF A

BETWEEN NOCZIM, THE ZIMBABWE MINISTRY OF MINES AND

ENERGY, SOUTH AFRICA’S ENGEN (26 PERCENT STAKEHOLDER IN

CBZ, AND ITSELF 80 PERCENT OWNED BY PETRONAS OF

MALAYSIA), CBZ, AND METROPOLITAN BANK. GONO ELABORATED

THAT THE DEAL INVOLVES A US$50 MILLION REVOLVING CREDIT

FACILITY THAT IS TIED TO EXPORT EARNINGS ON SPECIFIC

COMMODITIES, SUCH AS COTTON AND TOBACCO. THE CREDIT

CONFIDENTIAL

 

PAGE 04       HARARE 05397 01 OF 02 261404Z

SCHEME INCLUDES A $25 MILLION 90-DAY AND A $25 MILLION

360-DAY REVOLVING CREDIT LINE (REF A). CBZ HELPED TO

NEGOTIATE THE 360-DAY FACILITY WITH MALAYSIA DIRECTLY,

AND IT HAS HELPED TO RESTART THE IPG FACILITY, WHICH HAD

BEEN SUSPENDED.

 

5. (C) ON THE FATE OF NOCZIM, GONO STATED THAT IT IS ON

ITS WAY TO BECOMING SOLELY A REGULATING BODY WITH NO

PROCUREMENT AUTHORITY. ACCORDING TO THE GOZ’S CURRENT

THINKING, ZIMBABWE’S FUEL IMPORTERS WOULD HAVE THE

FREEDOM TO BUY FUEL DIRECTLY AT MARKET PRICES AND CUT

OUT THE NOCZIM MIDDLEMAN. THE GOVERNMENT WOULD STILL

HAVE A HAND IN DETERMINING FUEL PRICES, USING THE SOUTH

AFRICAN GOVERNMENT’S FORMULA (NFI) THAT WOULD ENSURE NO

LOSSES TO THE STATE OR SUPPLIERS. NOCZIM’S STAFF IS TO

BE REDUCED FROM 200 TO 15, AND IT IS TO MOVE OUT OF ITS

SEVEN-STORY HEADQUARTERS, GONO STATED. WHEN ASKED HOW

LONG NOCZIM HAD LEFT, GONO FELT THAT IT WOULD BE

EFFECTIVELY DISSOLVED BY THE END OF THE YEAR, BUT NOTED

COYLY THAT THERE WERE STILL POLITICAL OBSTACLES TO

OVERCOME. IN ANY CASE, GONO FELT THAT HE WOULD BE ABLE

TO MAINTAIN THE REPRIEVE FROM ZIMBABWE’S FUEL TROUBLES

FOR AT LEAST THE NEXT THREE TO FOUR MONTHS.

 

CONFIDENTIAL

 

CONFIDENTIAL     PTQ7156

 

PAGE 01       HARARE 05397 02 OF 02 261404Z

ACTION EB-00

 

INFO LOG-00   NP-00   AF-00   ACQ-00   CIAE-00 DODE-00 DOEE-00

DOTE-00 DS-00   FAAE-00 FBIE-00 VC-00   TEDE-00 INR-00

VCE-00   AC-01   NEA-00   NSAE-00 OES-01   ACE-00   SSO-00

SS-00   EPAE-00 DSCC-00 DRL-02   G-00     NFAT-00 SAS-00

/004W

——————89FEC2 261405Z /38

O 261404Z SEP 00

FM AMEMBASSY HARARE

TO SECSTATE WASHDC IMMEDIATE 7191

INFO NSC WASHDC IMMEDIATE

AMEMBASSY KUWAIT IMMEDIATE

DEPT OF TREASURY WASHDC IMMEDIATE

USDOC WASHDC IMMEDIATE

SOUTHERN AFRICAN DEVELOPMENT COMMUNITY

 

C O N F I D E N T I A L SECTION 02 OF 02 HARARE 005397

 

SIPDIS

 

NSC FOR SENIOR AFRICA DIRECTOR GAYLE SMITH

LONDON FOR CHARLES GURNEY

PARIS FOR BISA WILLIAMS

 

E.O. 12958: DECL: 09/26/05

TAGS: EPET PREL PREL PINR ECON SENV ZI SA

SUBJECT: ZIMBABWE BANK DIRECTOR PROVIDES SOME HOPE FOR

MORE STEADY FUEL SUPPLIES

 

CONFIDENTIAL

 

PAGE 02       HARARE 05397 02 OF 02 261404Z

6. (C) COMMENT: GONO WAS MORE CIRCUMSPECT WITH US THAN

IN HIS DINNER CONVERSATION A FEW WEEKS AGO IN WHICH HE

DESCRIBED ENERGY MINISTER SEKERAMAYI SENDING LETTERS TO

NOCZIM REQUESTING A CUT OF ANY NEW FUEL DEAL (REF B).

THIS IS LIKELY THE “POLITICAL OBSTACLE” THAT GONO WAS

REFERRING TO. EVEN IF GOVERNMENT OFFICIALS CONTINUE

SKIMMING OFF OF THE COUNTRY’S FUEL TROUBLES, IT APPEARS

THAT ZIMBABWE HAS SECURED ENOUGH FOREIGN FINANCIAL

BACKING TO TEMPORARILY STAVE OFF THE CONSTANT FUEL

DISRUPTIONS THAT HAVE PLAGUED IT FOR THE LAST TEN

MONTHS. QUEUES AT LOCAL PETROL OUTLETS HAVE BEEN

NOTICEABLY SHORTER SINCE THE SEPTEMBER 22 FUEL DEAL WAS

ANNOUNCED. WHETHER ZIMBABWE HAS FOUND A MORE LASTING

SOLUTION WILL DEPEND ON THE POLITICAL WILL OF MUGABE AND

THE ENERGY MINISTER TO DISSOLVE THE CORRUPT AND BADLY

MANAGED NOCZIM. THAT MAY PROVE DIFFICULT IF THE NEW

ENERGY MINISTER AND OTHERS LIKE HIM CANNOT WEAN

THEMSELVES FROM THE BLOATED PARASTATAL.

 

7. (C) BIO NOTE: GONO WAS BORN IN BUHERA, MANICALAND

PROVINCE, ZIMBABWE ON NOVEMBER 29, 1959. HE IS MARRIED

AND HAS FOUR CHILDREN AGES 18, 16 (TWIN GIRLS), AND 4.

HE DESCRIBES HIMSELF IN HORATIO ALGER TERMS, STARTING

OUT AS A TEA-MAKER/CLEANER AT A LARGE COMPANY, WHO USED

HIS PAYCHECK TO PUT HIMSELF THROUGH SCHOOL FROM GRADE

SCHOOL TO UNIVERSITY. GONO HINTED THAT PRESIDENT MUGABE

RECENTLY SOUNDED HIM OUT FOR A CABINET APPOINTMENT,

WHICH HE TURNED DOWN (“THE HARDEST DECISION OF MY

LIFE”). THE BANK MANAGING DIRECTOR CLAIMS HE HAS NO

POLITICAL AMBITIONS (“YET”) BUT DOES WANT TO GALVANIZE A

REPUTATION AS A CORPORATE TURNAROUND EXPERT, WHICH HE

CONFIDENTIAL

 

PAGE 03       HARARE 05397 02 OF 02 261404Z

HAS APPLIED TO CBZ, ONCE INSOLVENT BUT NOW ZIMBABWE’S

THIRD-LARGEST BANK. GONO HOPES TO COMPLETELY PRIVATIZE

THE BANK (THE GOZ IS THE 20 PERCENT SILENT SHAREHOLDER)

AND LIST IT ON THE NASDAQ. THE CBZ MANAGING DIRECTOR IS

CLOSE TO PRESIDENT MUGABE AND HAS A CHECKERED REPUTATION

IN THE BUSINESS COMMUNITY. END COMMENT.

 

MCDONALD

 

CONFIDENTIAL

 

>

 

(16 VIEWS)

Don't be shellfish... Please SHARETweet about this on Twitter
Twitter
Share on Facebook
Facebook
Share on LinkedIn
Linkedin
Email this to someone
email
Print this page
Print

Like it? Share with your friends!

0
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.

0 Comments

Your email address will not be published. Required fields are marked *