Gideon Gono: a villain or saint?

I WAS encouraged to learn that Dr. Gideon Gono, Governor of the Reserve Bank of Zimbabwe (RBZ), had agreed to use the New Zimbabwe.com platform to address questions from the New Zimbabwe.com family.
When the role of a central bank is put in its proper context, it is instructive that most governors would not take the evangelical or political posture in the execution of their mandates but in Zimbabwe there exists a unique environment that has catapulted the Governor into a quasi political animal with unprecedented exposure and profile.
In Zimbabwe’s 26 years as a democratic society, no governor has assumed the kind of power that Gono has and invariably his opinion and views have to be taken seriously.
In this vein, the staff of New Zimbabwe.com should be congratulated for providing an opportunity to interested people to engage in a conversation with one of Zimbabwe’s most important citizens. As I have always said, the only power people who do not have power have, is the power to organise.
Gono can boast of the vast resources at his disposal to spin and many may have accepted his use of unorthodox methods to address simple problems that confront Zimbabwe as normal and acceptable without critically examining the real and possibly irreparable danger that is inherent in the centralisation of power in a few hands with limited or no accountability.
The Zimbabwean economy has often been described as a patient in the intensive care unit and Gono has emerged as a specialist doctor to restore the life of this helpless patient.
Yes, Zimbabwe has known of only three black governors of the central bank since its independence but cannot claim the same in terms of its political leadership. It is common cause that Gono has been a governor for the last 36 months and his brief tenure will go down in history as a significant epoch event in the history of Zimbabwe. It is true that the role of the RBZ in the past 36 months may not be understood by many in the diaspora who are familiar with the institutional framework that underpins any democratic society.
Ordinarily, central banks do not deal with the public but focus on monetary policies and their clients are normally banks. Equally, the normal vehicle through which the resources of the government are allocated among competing interests is the budget and yet under Gono’s tenure, the RBZ now acts like a quasi-fiscal entity with direct commercial relationship with clients. No explanation has been provided regarding the basis on which a wholesaler can end up becoming a retailer without any institutional changes to support such a transformation.
There is a host of troubling constitutional, legal, political, and governance issues that arise out of the extraordinary role that Gono has found himself in. I will deal with these issues below using my own personal experience over the last three years. It is important that in taking advantage of the opportunity afforded to the New Zimbabwe.com family by Gono that the questions posed to him are focused and guided by national interest. With respect to national interest, it is important to underscore that this is a contested issue and there are many people in government that honestly believe that they have a monopoly to define what is in Zimbabwe’s national interest. Any person who may hold a different view is considered a saboteur and an enemy of the people of Zimbabwe.
In the event that you are considered to be acting against “Your Governor”, the consequences are clear and the benefits of compliance are self evident. I can safely say that the New Zimbabwe.com family may be the only constituency that Gono may not be able to inflict his poisonous medicine on but he is known to hold grudges with any person who may not see the world according to his eyes. It is instructive that the business sector in Zimbabwe has over the last three years been reduced to a docile force that is incapable of defending its own interests against an onslaught that is being perpetrated by the central banks through a variety of overt and clandestine activities. The supply chain role of companies and state institutions has now been taken over by the RBZ and suppliers to government institutions no longer have to go through tenders but only have to satisfy the RBZ whose capacity to be a broker in this complex business activity still has to be tested.
Patriotism
I have borrowed the definition of patriotism from the online encyclopedia, Wikipedia, as follows: Patriotism denotes positive and supportive attitudes to a 'fatherland' (Latin patria), by individuals and groups. The 'fatherland' (or 'motherland') can be a region or a city, but patriotism usually applies to a nation and/or a nation-state. Patriotism covers such attitudes as: pride in its achievements and culture, the desire to preserve its character and the basis of the culture, and identification with other members of the nation. Patriotism is closely associated with nationalism, and is often used as a synonym for it. Strictly speaking, nationalism is an ideology - but it often promotes patriotic attitudes as desirable and appropriate. (Both nationalist political movements, and patriotic expression, may be negative towards other people's 'fatherland').
Patriotism has ethical connotations: it implies that the 'fatherland' (however defined) is a moral standard or moral value in itself. The expression my country right or wrong - perhaps a misquotation of the American naval officer Stephen Decatur, but also attributed to Carl Schurz - is the extreme form of this belief. Patriotism also implies that the individual should place the interests of the nation above their personal and group interests. In wartime, the sacrifice may extend to their own life. Death in battle for the fatherland is the archetype of extreme patriotism.
Gono has successfully manipulated the nationalist pedigree of Zanu PF to locate his policies under a general umbrella of nationalism with a clear strategy to ensure that any critics can easily be labeled as unpatriotic with disastrous consequences. Most fascist regimes in human history have used the same strategy with national and international consequences. When you hear any governor of a central bank using nationalistic language as a way to advance unpopular policies and programs you should have to be concerned.
Rule of Law
The importance of the rule of law and not rule by law is an important ingredient of any democratic civilization. It is important that the New Zimbabwe.com family critically evaluate the multitude of decrees that have been promulgated by President Mugabe under Gono’s tenure to determine whether Your Governor believes in the rule of law. Surely, if the laws of the nation are inadequate, why would Gono not trust parliament to review such laws and pass new ones?
Against a background of a contested political space that has an opposition represented in parliament, one would not expect a governor of a central bank, itself a creation of the law, to act outside the provisions of the law using nationalistic and state of emergency language. I am sure that legal scholars are counting the number of statutory instruments that have been gazetted during Gono’s tenure and test such instruments against the Bill of Rights entrenched in the constitution of Zimbabwe. New crimes have been manufactured dealing with externalisation and corporate governance that would be offensive to any country that believes in a constitutional democracy. I do hope that questions can be posed to Gono on this regard. Ultimately, right policies induce good behaviour and policies that are informed by real national interest would respect property and human rights of citizens.
Corporate Governance at the RBZ
The RBZ is a body corporate whose functions are defined at law. There is a perception rightly or wrongly that Gono is behaving like the owner of the bank and his actions would not pass the test of good corporate governance. Examples are many that clearly demonstrate that the RBZ under Gono is no longer accountable to its board and in turn to the parliament of Zimbabwe. It would not be surprising that the parliament of Zimbabwe whose legitimacy is derived from the people is not aware of the full extent of the activities of the RBZ and how they are undermining the constitutional democracy that they purport to be upholding by remaining in parliament.
We have noted with concern the scandals that are unfolding at the RBZ including the Pinnaclegate, Fertilisergate and SMMgate all serving to demonstrate that there is something fundamentally wrong taking place at the RBZ. What is amazing is that the domestic media appears to have been sufficiently compromised to the extent that these scandals are not pursued to their logical conclusion. Can you imagine for example if a person like James Makamba was involved in the Fertilisergate, what would have been the attitude of Gono?
Selective targeting
The selective application of the law remains one of the key defining characteristic of Gono’s tenure. Although all men are born equal, it is evident that they are all not equal before the law. The reliance of private rational economic players on the parallel market in the allocation of scare foreign currency is well known and the RBZ is not immune from participating in the black market. However, anyone who is defined as patriotic is spared the humiliation and harassment by the RBZ using the law enforcement agencies.
Theft of Private Property
It is common cause that a constitutional amendment was required to expropriate land from the historically advantaged white settler community because the constitution of Zimbabwe did not have a provision allowing the government to assume ownership of private property without qualifying the Bill of Rights of the target group.
However, not all Zimbabwean land owners benefited from a colonial heritage and yet the definition of the targeted land for expropriation was not amended to isolate only those whose ownership was a direct result of colonial abuse. The approach taken rightly or wrongly was that all land should be treated as if it was stolen and, therefore, all land owners were brushed with the same broom. Having established that all land was stolen from black Africans by whites, the next step was easy and to date no African country has been convinced about the unfairness in the blanket approach adopted by the government and the consequences on domestic and foreign investor confidence. Due to the racial undertones of the land issue, people have taken a dismissive approach choosing to say that the end justifies the means. The national psyche has now been changed to accept the legitimacy of property rights theft by the state to the extent that most of the victims have found no sympathy for their plight.
Having successfully made the case that property rights can be undermined with popular domestic and pan-African support, the RBZ under Gono came to the rescue in the onslaught against private property. Bilateral agreements under which the property rights of foreign investors were supposedly protected were thrown out of the window. The RBZ expanded its role into the mineral sector and, indeed all exporting sectors, choosing to nationalize all exports and treating all exporters as if they were agents of the central bank. Agreements were revisited and control of the mining sector rapidly moved to the RBZ.
My case has been in the media and at the core of the case is the role of the RBZ in expropriating my assets. When Gono was appointed in December 2003, his first act apart from targeting the asset management companies was to announce a Monetary Statement whose sole purpose was to place all the exporters under the control of the RBZ. All dispensations granted to the exporters were removed and in return a new animal was born i.e. Productive Sector Facilities under which exporters were rewarded with concessionary financing provided by commercial banks on condition that they would be penalized with an exchange rate that was arbitrarily determined. SMM was affected by this move, but in hindsight, it was part and parcel of a strategy to create a standing for the RBZ to intervene in the affairs of my companies with the ulterior motive of nationalization.
To complete the plot, allegations were made that I had externalised substantial funds from Zimbabwe and that I was a fugitive. At first, I did not believe that Gono was the man behind all this and I naively called him to arrange a meeting. He strangely agreed to meet me and the executives of SMM. We met at his office on March 1, 2004, and it was clear at the meeting that there was a conspiracy in the making involving Messrs. Manikai, Mkushi, Munyati, Gwaradzimba, and First Bank. Although other companies were accessing productive sector facilities to cover their requirements, a directive was issued by Gono to deny my companies any access to the funding. SMM managed to access some funds but that was not sufficient. What was more disturbing was that Gono instructed his officers not to grant any foreign currency to my companies as a way of crippling them.
However, the companies were resilient and he then dispatched a team to South Africa to investigate the allegations of externalisation. The team was led by the former Commissioner of the Zimbabwe Republic Police, Mr Mukurazhizha, whose understanding of business is questionable. It emerged that this was just a witch hunt to create a perception that there was a case. When the team did not get anything, Gono then ordered that I be extradited to Zimbabwe and this was promptly done. The Attorney General’s office was made to work at the weekend to manufacture a case against me. Hilary Munyati, a former CEO of SMM, was given a job at the RBZ and the onslaught was in earnest.
When the extradition project failed, this was followed by attempts to retroactively create a scenario where SMM would be considered to be a state indebted insolvent company for the sole purpose of establishing a legal basis to nationalize my assets. Under the decree promulgated by President Mugabe on the advice of Gono, all the SMM bank loans were classified as state loans even though SMM never borrowed any funds from the state. What is strange is that in the decree the state was never defined. I have attached herewith correspondence (click here) between SMM Holdings Limited (SMMH), the sole shareholder of SMM that confirms my submission about the illegal and unconstitutional actions that have now come to characterize Gono’s reign. The letter of 13 February 2006 that is attached was never responded to by the RBZ and through this initiative; I do hope that New Zimbabwe.com will obtain answers to the pertinent questions that will help expose the corruption that is taking place at the RBZ. I now understand why people would lose trust in government if the actions of the RBZ in the SMMgate are anything to go by.
My case is one of many and it is important that we interrogate the hypothesis that Gono is not a villain but just a practitioner who is concerned about the progress of Zimbabwe and in advancing a national interest. I do hope that people will have the patience to read the attached documents and make conclusions for themselves.
I never thought a day will arrive in Zimbabwe’s history where the RBZ would act in the manner highlighted in the attached correspondence. I know that Gono will try to make the case that the SMM matter was concocted above him and that the RBZ was just a facilitator in the expropriation of my assets but the evidence suggests otherwise. How can SMM’s loan from commercial banks be unilaterally converted into state obligations without any due process? Why would Gono issue instructions to the RBZ to disburse almost Z$1 trillion (using the old currency) without any board approval? To the extent that the RBZ’s funds belong to the people of Zimbabwe, how can it be justified that funds are disbursed of this magnitude on the instructions of one person without any feasibility or viability study?
Although the Reconstruction Act has been aptly described as Mawere Law, the law now exists in Zimbabwe allowing the government to superimpose itself in commercial transactions and arbitrarily become a creditor to your company for the sole purpose of nationalising your assets. In my case, ZESA, NSSA, RBZ, and MMCZ were used as instruments for nationalisation and yet the four institutions are body corporates in their own right. It is important that all the people who chose to ask Gono questions take due care that their assets may be fair game if you decide to ask difficult questions.
It would be wrong to preempt Gono’s show but I just thought that it was important in the interests of Zimbabwe that I devote my column to raise some of the key troubling questions that Gono would need to address in the conversation with the New Zimbabwe.com family.