Institute for War and Peace Reporting | Giving Voice, Driving Change

Gono Under Pressure to Go

Controversial reserve bank governor fighting for his political life as the MDC takes charge of finance portfolio.
By Chipo Sithole
Gideon Gono, governor of the Reserve Bank of Zimbabwe, seems determined to cling onto his job amid mounting opposition clamour for his removal.

Zimbabwe’s economy cannot recover without outside support but it seems, for as long as Gono is in charge, western donors will be deeply reluctant to fund the new government, in which MDC leader Morgan Tsvangirai and President Robert Mugabe share power.

Asked if Gono's sacking was a necessary step before aid was released, a prominent western diplomat said, "Everyone knows it is. It's one of the key indices [of whether Zimbabwe is a fit recipient of aid]. Tsvangirai has said it is one of the first things he will do."

Analysts believe Gono, 49, has played a central role in the collapse of Zimbabwe’s economy.

As controller of the country's finances since 2003, Gono has played a key role in fundraising for Mugabe's ruling ZANU-PF party, printing money with reckless abandon to sustain the Mugabe administration’s profligate spending. As recently as February 2, the central bank knocked 12 zeroes off the local currency and introduced seven new notes

Gono’s policies have been one of the main drivers of the country's hyperinflation, officially over 231 million per cent, but estimated by independent analysts to be 6.5-quindecillion novemdecillion per cent, or 65 followed by 107 zeroes.

Donor funds have also disappeared under his watch, including 7.3 million US dollars donated last year by the Global Fund to Fight AIDS, TB and Malaria, and intended to provide anti-retroviral drugs for Zimbabweans living with the deadly HIV virus.

Gono's mandate was renewed for a second five-year term in December 2008, sparking opposition outrage. Elton Mangoma, the MDC’s deputy secretary for economic affairs, said Gono’s re-appointment went "against the spirit of the September 15 power-sharing agreement" between the MDC and ZANU-PF, and the MDC would not join the inclusive government while he remained head of the central bank.

After four months of resisting intense pressure from leaders across southern Africa, Tsvangirai announced on January 30 that he would join an inclusive government as prime minister, but demanded that Gono be removed from his position before he takes the oath of office on February 11. Tsvangirai says he cannot fulfil his mandate to revive Zimbabwe's moribund economy with a central bank chief who is incompetent and has become overly powerful and usurped the power of the finance minister by dabbling in “quasi-fiscal policies”.

The power-sharing deal sets out that all executive appointments must be made after consultation between Mugabe and his prime minister. According to the agreement, the MDC will take charge of the finance ministry, under whose aegis the central bank falls, and, according to MDC spokesman Nelson Chamisa, "in the eyes of the Zimbabwean people and the MDC, a reserve bank governor is yet to be appointed".

Commentators believe that Mugabe’s aim in keeping Gono was to exclude the MDC from economic policy and to block reform.

As the MDC announced its decision to join an inclusive government, Gono was reportedly meeting with Mugabe, seeking assurances that he will keep his job. While details of that meeting are not immediately available, Gono has come out with all guns blazing, receiving acres of editorial space in the state-controlled media dismissing calls for his removal.

"I am aware that there are some both locally and externally who have been and are calling for my head for whatever reasons, but the seriousnesss of the matters at hand requires that any level-headed individual ignore such petty calls and rise above trivialities," Gono is quoted as saying in a lengthy front-page article in The Sunday Mail on February 1.

"Many Zimbabweans agree that over the past five years, the reserve bank's various programmes, in many ways helped Zimbabwe forestall and foreclose total collapse amid the tightening grip of the illegal sanctions imposed on the country."

Leading economist John Robertson says "it appears Gono still does not understand the source of the country’s economic problems, as he continues to claim Zimbabwe is under an economic embargo", when in fact the so-called sanctions comprise a travel ban on regime officials precluding them from visiting the United States and Europe for shopping trips, and an arms embargo banning the sale to Zimbabwe of military hardware, which has been used to put down peaceful opposition protests.

As pressure on Gono has grown with the collapse of the economy, he has blamed sanctions, banks, the stock exchange, black-market currency dealers and insurance companies. As well as firing bankers, he has blacklisted more than 20 investment companies and frozen their accounts.

Exiled Zimbabwean businessman Mutumwa Mawere said he fears Zimbabweans will endure another five years of "political manipulation" by Gono if the MDC is not steadfast in its call for his ouster.

"During his first term, he was able to divert attention from the core source of the political and economic crisis by manufacturing enemies of the state," Mawere said. "His tenure witnessed the centralisation of executive power and the emergence of the RBZ (Reserve Bank of Zimbabwe) as the super state."

Mawere said Gono was preoccupied with blaming others for the collapse of the economy, yet he was to blame for most of the damage. On February 2, Gono presented a first-quarter monetary policy review statement laden with his supposed achievements and rubbishing the opposition for heightening calls for his dismissal.

"In Zimbabwe," Gono said, "a common tactic in this blame game has been to single out the central bank and central bank governor with easy-to-make claims that I am personally to blame for the self-evident and very painful economic situation afflicting just about everyone in our country today.

"Against this background I wish to place on record, and to do so with a sense of personal and national pride, that as governor of the central bank I have no regrets about the fact that my team and I have not hesitated to put out the fires that some vested interests have been setting up to burn our country’s economy in the hope that the ‘bus can crash’."

Gono was referring to controversial remarks by the MDC’s policy coordinator, Eddie Cross, that the party is prepared to see the “bus” – meaning the state – "crash and burn" if there is no equitable power-sharing.

Branding MDC officials "snakes in suits”, Gono asserted "this bus is not about to, and will not crash”.

"Furthermore," he continued, "the message needs to be delivered that the bus driver is also not about to take any leave of absence, least of all before the job is done and done well."

Gono pledged to stop the central bank’s widely condemned quasi-fiscal operations by returning it to its core business of monetary policy formulation and implementation.

He also promised to streamline the bank, laying off some workers in what he termed "a massive restructuring and realignment exercise”.

Economists said Gono’s promises to turn over a new leaf were not new and should be dismissed with contempt.

"Its just posturing and he just wants to keep his job and then revert to his old ways. No one should buy this nonsense," said one. "We need a new broom."

The MDC expressed shock at Gono’s presentation of the monetary policy statement when his tenure was in dispute. "This idea of jumping the gun and hurriedly and nocturnally presenting the monetary policy is worrisome," said Chamisa. "That was not a monetary policy statement – it was a manifesto, and a bad one at that."

Hope that the foreign aid tap will be turned on again to help the country recover from its current economic chaos was one of the most powerful pressures that forced Mugabe finally to share power with Tsvangirai.

According to one diplomat, Gono has no credibility whatsoever and, while the international community has offered billions in aid to a reforming Zimbabwe, it is essential that the power-sharing agreement reached last week is seen to work. "And it won't work as long as Gono remains at the helm of the central bank," he said.

Chipo Sithole is the pseudonym of an IWPR-trained reporter in Zimbabwe.