Why Mugabe can’t fire Gono

President Robert Mugabe cannot fire central bank governor Gideon Gono because he knows where the Zimbabwe African National Union- Patriotic Front skeletons are buried.

This was said by the United States embassy in Harare after Finance Minister Tendai Biti increased pressure on Gono by demanding that he should be kicked out of a cabinet meeting.

Biti had only been in office for two months.

He argued that important donor nations such as the US and Britain would not fund a recovery while Gono remained at the helm of the Reserve Bank.

A cable released by Wikileaks says Mugabe, however, showed no inclination to fire his loyal banker who has been the lynchpin to ZANU-PF currency manipulation and corruption schemes, and knows where the ZANU-PF skeletons are buried.

Full cable:

Viewing cable 09HARARE192, ZIM NOTES 03-06-2009

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UNCLAS SECTION 01 OF 04 HARARE 000192

AF/S FOR B. WALCH

ADDIS ABABA FOR USAU

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STATE PASS TO USAID FOR L.DOBBINS AND E.LOKEN

COMMERCE FOR ROBERT TELCHIN

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E.O.12958: N/A

TAGS: PGOV PREL ASEC PHUM ECON ZI

SUBJECT: ZIM NOTES 03-06-2009

———–

¶1. SUMMARY

———–

Topics of the week:

– Pressure Rises on Gono…

– Tsvangirai Urges West to Move Towards Lifting of Sanctions…

– Cabinet Reveals Loyalties and Priorities…

– Permanent Secretaries to Go?

– NGO Report Exposes Diamond Industry and Abuses…

– PM Tsvangirai Skips Party and Mugabe Reaffirms Land Reform…

– Mukoko Out, Bennett Still In…

– Cholera Update…

– USAID adds US$2.2m to Health Interventions…

– ZIMSEC Begins Marking 2008 Exams…

– UZ Fees Reduced…

– Civil Servants Get U.S. Dollar Allowances…

– Food Security Update…

– Food Security Update Continued…

– Tobacco Production Dropping…

– Cost of Food Continues to Fall…

– Prices Tumble on Stock Exchange…

– Zimbabwe Dollar Steady on the Parallel Market…

—————————–

On the Political/Social Front

—————————–

¶2. Pressure Rises on Gono… Finance Minister Tendai Biti escalated

pressure on Reserve Bank of Zimbabwe Governor Gideon Gono by

demanding his ouster in a Cabinet meeting this week. Biti argued

that important donor nations such as the U.S. and the UK would not

fund a recovery while Gono remained at the helm of the Reserve Bank.

Mugabe, however, shows no inclination to fire his loyal banker who

has been the lynchpin to ZANU-PF currency manipulation and

corruption schemes, and knows where the ZANU-PF skeletons are

buried… See Harare 184.

¶3. Tsvangirai Urges West to Move Towards Lifting of Sanctions… PM

Tsvangirai made his inaugural address to Parliament on March 4 where

he urged the international community to observe Zimbabwe’s efforts

and progress and move towards a lifting of sanctions. (The Herald

on its front page trumpeted Tsvangirai as calling for the West to

lift sanctions.) He also called for national healing, media freedom

and an end to political violence. On the same day, President Obama

renewed the U.S.’s targeted financial sanctions against Zimbabwe for

at least one additional year. The full text of Tsvangirai’s speech

is available on his newly-launched website,

http://www.zimbabweprimeminister.org/

¶4. Cabinet Reveals Loyalties and Priorities… The MDC and ZANU-PF

picks for cabinet seats reflect both Mugabe’s and Tsangirai’s

priorities and strategies. See Harare 180.

¶5. Permanent Secretaries to Go? On February 24, President Mugabe

unilaterally appointed permanent secretaries – the leading

bureaucrats in each ministry that can make or break a minister’s

ability to make things happen. PM Tsvangirai and Deputy PM Arthur

Mutambara protested the action, averring that the Interparty

Political Agreement and Amendment 19 required consultation and

agreement. Mugabe responded that he had the power to make the

appointments. Nevertheless, after a meeting with Tsvangirai and

Mutambara, all permanent secretaries were asked to submit their CVs

to Tsvangirai on the 27th in what may be a retreat by Mugabe.

¶6. NGO Report Exposes Diamond Industry and Abuses… NGO

Q6. NGO Report Exposes Diamond Industry and Abuses… NGO

Partnership Africa Canada released a report on March 4 on human

rights abuses surrounding Zimbabwe’s diamond fields. The report

HARARE 00000192 002 OF 004

calls on the Kimberley Process to suspend Zimbabwe until it can

ensure Zimbabwe’s diamonds are all mined and processed under a

controlled system. For the full report, see: http://www.pacweb.org

/e/images/stories/documents/18_zimbabwe

-diamonds_march09-eng.pdf

¶7. PM Tsvangirai Skips Party and Mugabe Reaffirms Land Reform…

After Prime Minister Morgan Tsvangirai failed to attend President

Mugabe’s 85th birthday party on February 28, the government

mouthpiece The Herald took the unusual step of running a front page

clarification that Tsvangirai didn’t attend “upon realizing it is a

party program. It is not a snub.” Mugabe used the occasion to

reaffirm his commitment to land redistribution and to call on the

remaining white farmers to leave. On Tuesday the High Court ruled

that the SADC tribunal’s decision that over 70 white farmers could

keep their seized property was illegal. On Thursday evening, the

president of the Senate, Edna Madzongwe and a group of 20 supporters

went to one of the farms, brandishing a copy of The Herald’s report

on the decision. Madzongwe demanded that work at the farm cease

immediately.

¶8. Mukoko Out, Bennett Still In… Deputy Agriculture

Minister-designate Roy Bennett is still in a Mutare prison, due to a

decision by Supreme Court Judge Paddington Garwe to allow the State

to appeal a previous High Court ruling granting bail. The MDC

accused Justice Minister Patrick Chinamasa and Attorney General

Johannes Tomana of unlawfully blocking Bennett’s release.

Separately, of the 32 people abducted at the end of 2008, 16 are now

out on bail, 6 remain in custody pending hearings on Friday March 6,

1 escaped, and 9 are still missing. Importantly, human rights

defender Jestina Mukoko was granted bail on Monday March 2. Nine of

those on bail had to pay a whopping (by Zimbabwe standards) US$600

for their release. See Harare 182.

¶9. Cholera Update… With deaths exceeding 4,000 out of about

88,000 cases, cholera still ravages Zimbabwe. The UN World Health

Organization reports an overall case fatality rate (CFR) of 4.5

percent, and its revised “worst-case scenario” shows the epidemic

peaking between 81,000 and 115,000 cases. Since CFR peaked at 5.7

percent on January 21, WHO has reported a continuing decline at

treatment centers, likely due to improved case management and

programs emphasizing early treatment.

¶10. USAID adds US$2.2m to Health Interventions… In addition to

its HIV/AIDS assistance, USAID this week released an additional

US$2.2 million for health programs in Zimbabwe. UNICEF received

US$300,000 for its measles vaccination campaign and John Snow

International received US$1.7 million to expand the capacity of the

national medical supply logistics system, ensuring that drugs and

commodities are properly coordinated, managed, and distributed. Two

hundred thousand will be spent on anti-malarial spraying. These

programs will help shore up the rapidly deteriorating health

Qprograms will help shore up the rapidly deteriorating health

infrastructure.

¶11. ZIMSEC Begins Marking 2008 Exams… The Zimbabwe Secondary

Examination Council (ZIMSEC) began grading 2008 national exams this

week after the Ministry of Education appealed to the RBZ for over

US$4 million to pay for transportation, lodging, food, and stipends

for test graders. June 2008 results that were supposed to be

available last August were released on Tuesday, and November 2008

exam results, which were supposed to be available by January, will

be ready by the start of April. Students cannot proceed to the next

level of schooling without passing national examinations.

¶12. UZ Fees Reduced… After the University of Zimbabwe Vice

Chancellor announced that second semester fees would range from

US$1,000-1,800, Minister of Higher Education Mudenge went into a

rage and cut them to US$200-600. He further claimed that no student

would be turned away for inability to pay, but instead would be

HARARE 00000192 003 OF 004

encouraged to join a “cadetship” program, bonding the student to the

GOZ in exchange for fees. The Zimbabwe National Student Union

(ZINASU) continues to condemn any forex fees, asserting that an

education should be free for those who cannot afford it.

———————————–

On the Economic and Business Front

———————————-

¶13. Civil Servants Get U.S. Dollar Allowances… The GOZ began

paying government employees a US$100 monthly allowance in February

in the form of vouchers to top up their (worthless) Zim dollar

salaries. Putting the brakes on abuse of the voucher printing

press, controlled by RBZ Governor Gono, Finance Minister Biti

announced that starting this month the GOZ would pay allowances

directly into employees’ bank accounts. Not all civil servants got

their vouchers and some banks could not pay out the full value for

lack of foreign exchange. See Harare 183.

¶14. Food Security Update… USAID’s Famine Early Warning Systems

Network reported greater food availability in February 2009 than in

January 2009 due to increased imports by commercial operators and

humanitarian agencies. These groups plan to assist close to 7

million people this month, up from aound 5 million in December

¶2008. Zimbabwe’s population may have decreased from 11.6 million at

the time of the 2002 census figure, to only 8 or 9 million

currently. For the full report, see: http://www.fews.net

/docs/Publications/Zimbabwe_2009_

02%20final.pdf.

¶15. Food Security Update Continued… A January 2009 Zimbabwe

Vulnerability Assessment Committee urban assessment showed that 33

percent of urban households were food insecure compared to 24

percent in November 2006. Surprisingly, the proportion of urban

household reporting income from remittances fell from 28 to 19

percent. In spite of all difficulties, 64 percent of urban

households (30 percent of food insecure ones) support other

households financially or with food. For the full report, see:

http://ochaonline.un.org/OchaLinkClick.

aspx?link=ocha&docId=1106327.

¶16. Tobacco Production Dropping… Zimbabwe’s publicly-listed

tobacco company TSL forecast 2008/09 production at between 35-40

million kg, although a report in The Herald (03/05/09) stated that

output will decline by 50 percent on last year’s figure of 45

million kg. The crop was adversely affected by input shortages and

sub-economic prices in 2008.

¶17. Cost of Food Continues to Fall… The EU Delegation estimated

that the cost of its 18-item low-income food basket for a family of

six fell by 3 percent on the week from US$220 to US$213. On a

related note, mobile network provider Econet is running a promotion

that effectively reduces rates by 20 percent to increase usage.

¶18. Prices Tumble on Stock Exchange… Trading on the Zimbabwe

Stock Exchange remains volatile as the market continues to look for

the true value of shares in foreign currency terms. Although

volumes have risen since the Exchange re-opened, the market

Qvolumes have risen since the Exchange re-opened, the market

capitalization of most counters has declined significantly. The

proposed introduction of two more levies by the Securities

Commission will raise transaction costs and discourage foreign

investment.

¶19. Zimbabwe Dollar Steady on the Parallel Market… The Zimbabwe

dollar has held steady at Z$6 trillion (Z$6 revalued) against the

U.S. dollar since the introduction of foreign exchange licensed

shops in October 2008, confirming the currency’s demise as a medium

of transaction. Oddly, only the old Z$50 billion note remains in

use, but solely by commuter bus operators who had been holding onto

HARARE 00000192 004 OF 004

the notes when demand for the local currency collapsed.

—————–

Quote of the Week

—————–

¶20. “I am still in control and hold executive authority, so nothing

much has changed.” — President Robert Mugabe, addressing a crowd of

2,000 at his 85th birthday party in Chinhoyi on February 28.

¶21. “Brutal suppression, wanton arrests and political persecution

impede our ability to rebuild our economy… I therefore urge the

international community to recognize our efforts and to note

progress in this regard, and to match our progress by moving toward

the removal of restrictive measures.” — Prime Minister Morgan

Tsvangirai, addressing Parliament on March 4.

MCGEE

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