Masiyiwa said Gono starved the nation to pay IMF

Econet boss Strive Masiyiwa told United States embassy officials on 31 August 2005 that Reserve Bank of Zimbabwe governor Gideon Gono had “starved” the nation of fuel and other key items to accumulate the $120 million it paid the International Monetary Fund two days earlier.

Ironically Gono had told Masiyiwa the news that same day.

The United States government had been caught unawares about the payment and was trying to find out where Zimbabwe had got the money as it was about to be expelled from the international financial institution.

Gono said the only people that were aware of the payment were President Robert Mugabe, Gono himself and two Central Bank advisors. Even Finance Minister Herbert Murerwa was not aware until late August 29.

Full cable:

Viewing cable 05PRETORIA3543, SOUTH AFRICA DENIES PAYING ZIMBABWE’S IMF BILL;

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

C O N F I D E N T I A L PRETORIA 003543

SIPDIS

DEPT FOR AF/S B. NEULING AND M. TABLER-STONE, EB/IFD, EB/OMA

LONDON, PARIS, BRUSSELS FOR AFRICA WATCHERS

E.O. 12958: DECL: 08/30/2015

TAGS: PREL PHUM ECON KDEM ZI SF

SUBJECT: SOUTH AFRICA DENIES PAYING ZIMBABWE’S IMF BILL;

GONO SAYS GOZ PAID DEBT ITSELF

REF: A. 8/30 NEULING-RIPLEY EMAILS

¶B. PRETORIA 3141 AND PREVIOUS

Classified By: Charge d’Affaires, a.i. Don Teitelbaum

Reasons 1.4(b) and (d)

¶1. (C) Per reftel A, the IMF reported to the USG August 29

that Zimbabwe paid $120 million toward its IMF debt. South

African Department of the Treasury officials that Post

contacted August 30-31 were unaware of any South Africa

payments on behalf of Zimbabwe to the IMF. Zimbabwean

Central Bank Governor Gideon Gono told Strive Masiyiwa (see

bio-note below) August 31 that the Government of Zimbabwe

(GOZ) paid the loan itself without outside assistance. In an

August 31 telcon with PolOff, Masiyiwa said that Gono told

him he had “starved” the nation of fuel and other key items

to accumulate the hard currency. IMF staff were not aware of

the GOZ reserves because they were accumulated only since

June 30. Gono said that South Africa was not aware of the

payment; only President Mugabe, Gono, and two Central Bank

advisors knew of the plan. Even Finance Minister Murerwa was

not aware until late August 29. Gono told Masiyiwa that the

GOZ made the payment as a “matter of national sovereignty.”

Masiyiwa said that Gono was excited and very upbeat about the

news.

¶2. (C) Comment: The payment of a chunk of Zimbabwe’s IMF

debt seems to take the wind out of the sails of the South

African-Zimbabwe loan negotiations (reftel B). While the GOZ

still owes some $170 million to the IMF and desperately needs

food, agricultural inputs, fuel, and electricity, the IMF

payment (and resulting diminishing of expulsion threat)

removes a key SAG leverage point. South Africa may still

make a loan/grant, but may have to abandon its political

conditions. Gono’s story (through Masiyiwa) that the GOZ

paid its own IMF debt is possible, but it also is possible

that other, unspecified parties made contributions that both

they and Zimbabwe want to keep secret. End Comment.

¶3. (C) Bio-Note: Strive Masiyiwa is a Zimbabwean businessman

and Chief Executive Officer of Econet Wireless, an

international telecommunications company. He lives in South

Africa in political exile. While a fierce opponent of the

Mugabe regime and MDC supporter, Masiyiwa remains in contact

with some GOZ officials, including Gono, who was once a

member of his corporate board. End Bio-Note.

TEITELBAUM

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