Tsvangirai persuades Gono to step down

Prime Minister Morgan Tsvangirai met central bank governor Gideon Gono to convince him to step down after a heated debate in cabinet that he should be investigated for the central bank debt.

Finance Minister Tendai Biti, backed by several Zimbabwe African National Union-Patriotic Front ministers from the Mujuru faction, called for an investigation into Gono’s malfeasance at the Reserve Bank of Zimbabwe which had accumulated a debt of US$1.2 billion.

The move was, however, thwarted by other ZANU-PF ministers who argued that Biti was essentially trying to investigate President Robert Mugabe.

Biti’s effort failed.

The Movement for Democratic Change’s next move was to get the House of Assembly to authorise a committee to investigate Gono.

Full cable:

Viewing cable 09HARARE356, ZIM NOTES 04-30-2009

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TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 04-30-2009

HARARE 00000356 001.2 OF 003

———–

¶1. SUMMARY

———–

Topics of the week:

– Continuing Stalemate…

– Farm Invasions Decreasing…

– MDC Targets Gono…

– Teachers Pledge to Strike…

– The Herald Attacks Eddie Cross…

– U.S. Volunteer Surgical Team Arrives…

– HIFA Enlightens Harare Again…

– Dutch Farmers Win Legal Battle over Farm Seizures…

– Sugar Crop Falls Further; no Exports to U.S….

– Food Prices Continue To Fall…

– Dollarization Sees Return Of Credit Facilities…

– Enthusiastic Response to Counterfeit Detection Training…

—————————–

On the Political/Social Front

——————————

¶2. Continuing Stalemate… Principals Robert Mugabe, Morgan

Tsvangirai and Arthur Mutambara have met five times in the last two

weeks to deal with outstanding issues. While agreement has

reportedly been reached on appointment of governors, permanent

secretaries, and ambassadors, a number of important issues remain

unresolved. These include: continuance in office of Reserve Bank of

Zimbabwe Governor Gideon Gono and Attorney General Johannes Tomana

who were appointed by Mugabe in violation of the September 15

Inter-Party Agreement; the stripping by Mugabe of portfolios from

Minister of Information and Communications Technology Nelson

Chamisa; refusal of Mugabe to swear in Roy Bennett as Deputy

Minister of Agriculture; continuing farm invasions and disruptions;

and the re-arrest of three MDC officials after a judge had ordered

them released on bail.

¶3. Tsvangirai’s honeymoon period is coming to an end and there is

growing impatience on the part of MDC officials and civil society to

move ahead. The lead editorial in this week’s Zimbabwe Independent

read, “Progress on reforms much too slow.” At an MDC ministerial

caucus last week, a number of ministers, led by Chamisa, called on

Tsvangirai to become more active in seeking resolution of these

issues. MDC sources have told us that if no significant progress is

made at the next principals meeting on Monday, Tsvangirai will hold

a press conference to place the blame on Mugabe and will then appeal

to SADC and the AU, as guarantors of the Agreement, to address

Mugabe’s intransigence.

¶4. Farm Invasions Decreasing… Trevor Gifford, president of the

Commercial Farmers’ Union, told the Ambassador today that farm

invasions and disruptions, while continuing, have significantly

decreased. Gifford also said he learned that Deputy Prime Minister

Arthur Mutambara, who led a ministerial delegation last week to

investigate the problem, tabled a report in Cabinet this week that

forcefully described the problem and placed responsibility on the

police for failing to deal with unlawful activity by those seeking

to take over farms or disrupt farm activities. Cabinet, which acts

by consensus, refused to take action to attempt to end these

unlawful activities and referred the matter to the principals.

¶5. MDC Targets Gono… In last week’s cabinet meeting, Minister of

Q5. MDC Targets Gono… In last week’s cabinet meeting, Minister of

Finance Tendai Biti, backed by several ZANU-PF ministers allied to

the Mujuru faction, reportedly called for an investigation into

Gono’s malfeasance at the RBZ. Other ZANU-PF ministers countered

that Biti was essentially trying to investigate Mugabe. After

heated argument, Biti’s effort failed. Separately, Tsvangirai met

with Gono to attempt to convince him to step down. The MDC’s next

step will be to have the House of Assembly authorize a committee

HARARE 00000356 002.2 OF 003

investigation of Gono.

¶6. Teachers Pledge to Strike… At their 28th national congress

over the weekend, Zimbabwe’s largest and mainstream teachers’ union,

ZIMTA, pledged that given no progress in their remuneration they

would not return to work for the opening of the second school term

on May 5. Civil servants, including teachers, continue to be paid a

monthly US$100 allowance, which ZIMTA states is insufficient for

teachers even to pay their own children’s school fees. Minister of

Education David Coltart responded with a vague statement that he was

working on a package for them, but he has not announced any

specifics or confirmation of funding to make a raise a reality.

Whether government schools will open next week remains anyone’s

guess.

¶7. The Herald Attacks Eddie Cross… After publishing a letter by

MDC-T MP Eddie Cross critical of its coverage of the U.S. and UK

ambassadors, The Herald began what a senior editor told us would be

a series of attack articles on the MP. Today’s vitriolic piece

leads with “Cross: Bitter and irrelevant.” Cross had criticized a

vicious attack by The Herald on Ambassadors McGee and Pocock in last

week’s paper. The Herald, surprisingly, published Cross’ letter,

which accused the newspaper of a lack of professionalism and

flagrant violation of provisions of the Global Political Agreement.

“When we are through with Cross, he will really be cross,” the

senior editor told us.

¶8. U.S. Volunteer Surgical Team Arrives… The U.S.-based

volunteer medical team, Operation of Hope, arrived in Harare this

week to provide another round of free surgical services to correct

cleft and lip palate deformities. The group will conduct operations

until May 16 at Harare’s private St. Anne’s Hospital. This is the

team’s fifth visit to Zimbabwe. The group last visited in October

2008, when it was forced to relocate to St. Anne’s from Harare

Hospital Children’s Ward due to inadequate facilities at the

government institution.

¶9. HIFA Enlightens Harare Again… The 10th anniversary edition of

the Harare International Festival of the Arts (HIFA) opened this

week under the theme “Enligh10ment.” The six-day festival features

hundreds of shows by dozens of artists from all over the world.

Once again, the festival is providing a platform for discussion of

contentious issues, as well as entertainment. For example, the

opening show directly attacked the political violence plaguing

Zimbabwe, including displaying the names of every person killed

since March 2008. Other shows tackle abuse of Zimbabwean migrants

in South Africa and land reform. The U.S. Embassy is represented by

the Rhythm Road tour of jazz quartet, Helen Sung & NuGenerations.

———————————–

On the Economic and Business Front

———————————-

¶10. Dutch Farmers Win Legal Battle over Farm Seizures… Following

a six-year battle between 13 Dutch farmers and the GOZ, the

International Center for the Settlement of Investment Disputes

QInternational Center for the Settlement of Investment Disputes

(ICSID) sitting in Paris ruled in the farmers’ favor. In its

decision of April 22, the Center ruled that the GOZ broke a

bilateral investment agreement with The Netherlands by seizing the

farms without providing just compensation. The ICSID awarded the

farmers more than 14 million pounds sterling (about US$21 million

which includes interest) in compensation. Whether the ruling could

lead to the seizure of GOZ assets overseas is not yet clear.

¶11. Sugar Crop Falls Further; no Exports to U.S…. Zimbabwe Sugar

Sales informed us that it would not supply its raw sugar under

favorable tariff-rate quotas (TRQ) to the U.S. for the 2008/09

period due to the shrinking crop size. The crop will fall to

286,000 MT this year, according to the sugar company, almost 6%

HARARE 00000356 003 OF 003

below last year’s production. The decline is due to the overall

state of the economy, price controls on sugar in the local market,

unavailability of inputs, electric power shedding, and rail and road

transport bottlenecks. Zimbabwe earned US$16.7 million in sugar

exports to the U.S. in 2006 and US$5.8 million in 2007, according to

the U.S. Department of Commerce’s TradeStatsExpress.

¶12. Food Prices Continue To Fall… An independent survey showed

that food prices fell by 2.4% in April.

¶13. Dollarization Sees Return Of Credit Facilities… The

improvement in the retail business environment ushered in by

dollarization has also brought about the return of credit facilities

which had been suspended in 2007 following the introduction of price

controls and hyperinflation. Most leading retailers are now

offering credit facilities with generous terms like a 25% deposit,

interest free, and three months to pay.

¶14. Enthusiastic Response to Counterfeit Detection Training… The

United States Secret Service (USSS) Attach and Special Investigator

from Embassy Pretoria provided training this week in Harare to

members of the American Business Association of Zimbabwe and the

Bankers Association of Zimbabwe on the security features of valid

U.S. denominations. Due to overwhelming interest and the recent

legalization of the use of the USD, the USSS team intends to return

to conduct additional sessions. Training the business community and

maintaining relationships is essential for Post to track the

prevalence of counterfeit U.S. currency, as the police do not report

counterfeit currency usage to the Embassy.

MCGEE

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