Who is Gono's boss?

"Without the work done by the RBZ, we would not be where we are now." - Robert Mugabe.
On Wednesday, July 26, President Mugabe paid tribute to the RBZ for playing a constructive and positive role in progressing Zimbabwe’s nation building agenda.
He singled out Gideon Gono, the Governor of the central bank, whom he appointed in December 2003, as the person deserving praise. He further observed that while he personally found Gono’s leadership acceptable and exceptional, Gono had become “so unpopular that some ruling party officials (and not opposition party members) want him dead”.
The question is why would ruling party officials want Gono dead, and not his principal, unless one accepts the proposition that the emperor has abdicated and that Gono is now de facto President of the ruling party and the unelected head of state?
Why would the head of the executive branch of the state publicly acknowledge that the country’s destiny is in the hands of one individual? Indeed, the President said that: “Without the work done by the RBZ, we would not be where we are now”.
It is clear from this statement that the so-called economic meltdown in Zimbabwe has not registered in the mind of the President and accordingly he sees no evil in the actions of Gono.
Could the President’s observation mean that he has lost confidence in his own cabinet and has pinned hopes for an economic turnaround on Gono? Who is Gono accountable to? Gono is one of three black governors appointed by Mugabe since independence and yet his predecessors have not received any public praise. What was missing in the President’s observations was a critical analysis of Gono’s record as governor. Indeed, no cost benefit analysis has been done on Gono’s tenure as governor in relation to the economy of Zimbabwe.
It is important that the impact of Gono on the economy of Zimbabwe and the real cost to the economy of his actions are measured and fully digested before accepting what appears to be a pedestrian assessment of his accomplishments against a background of a fast crumbling economy. One also needs to critically examine what, if any, benefits have accrued to the Zimbabwean economy from Gono’s tenure as Governor.
I believe that it is important that we interrogate Gono’s record not only because the President is aware that even his own party see danger in misguided policies and programs coming out of the RBZ, but because unfortunately the President, like many Zimbabweans, seems to have accepted that he has no cure to the ills of the Zimbabwean economy outside the context of Gono’s actions.
'Who is Gono anyway?' is an appropriate question to ask when a party elected by the people of Zimbabwe to govern seems to have outsourced the functions of government to a third party. Gono as Governor should ideally be accountable to board of governors of the RBZ. The RBZ is governed under an act of Parliament like many state actors. The Minister of Finance who is a member of Parliament should also ideally be responsible for directing the overall economic agenda of the country. The RBZ’s focus should be on monetary policy but it appears that under Gono, the mandate of the bank has been expanded to encompass fiscal and other issues that ordinarily would be under the control of cabinet.
Unfortunately, the real boss of Gono i.e. the Chairman of the board of governors of the RBZ, is not even known by the President let alone the other members of the board. In singling out Gono, the President must have been aware that he was in fact saying that his Minister of Finance was not up to the job.
If one understands the institutional framework that underpins the operations of the RBZ, one can safely conclude that there is a coup de etat in Zimbabwe that has been sanctioned by the President who now appears to have direct oversight of the RBZ when this should not be the case. Why would this particular Governor enjoy the direct confidence of the President when he should not be reporting to him? If one looks at Gono’s predecessors, it is obvious that they did not have the kind of relationship with the President that Gono enjoys and the question is what has changed to make this Governor assume extraordinary powers as acknowledged by the President.
It is also significant that Gono is not even an office bearer in the club from which the President is supposed to derive his legitimacy i.e. Zanu PF. Why would the President allow a non-office bearer to pilot the party and government’s agenda to the extent that the President accepts that the fate of the country is now inextricably linked to the actions of one man? What is the value of the electorate choosing a government of their choice when their fate can be surrendered to an individual whose actions are outside not only their control but the control of the party, parliament and cabinet?
Having posed a number of questions above, it is important that we attempt to locate Gono in the contemporary political economy of Zimbabwe. Gono is not the first one to assume presidential powers while the elected president remains in his own world fighting Bush/Blair and the white-settler community. I have no doubt that the same comments the President made about Gono would apply to the Professor Moyo when he was still in cabinet. In the case of Professor Moyo, the President would also have said: “Moyo, there are some circles that do not love him. I am sure that without the work done by the Ministry of Information, we would not be where we are now.”
In fact, Gono may have taken over from where Moyo left. Gono’s academic and professional career is well known to Zimbabweans. He has been acknowledged as one individual who through self determination has managed to transform himself from a tea boy to the second most powerful man in Zimbabwe. He learned through correspondence and he may share the passion for education through distance learning with the President and hence the natural attraction between the two. Gono rose through the ranks and worked for state institutions including the Zimbabwe Development Bank and the Commercial Bank of Zimbabwe before being appointed to his current position.
It is his tenure at the CBZ that provides interesting clues about his connection with the President and why he may have acquired, rightly or wrongly, the title of a 'turn-around genius'. His record at the CBZ has not been properly understood and digested for anyone to make an informed assessment of Gono’s capability and capacity as a manager. For the record, CBZ was the successor to the BCCI controlled bank that collapsed internationally leaving the joint venture project between the government of Zimbabwe and BCCI exposed. It is important to recognize that CBZ was a post-independence project by the government to enter into the banking arena but the government could not trust anyone locally to establish a partnership but chose a foreign bank as a majority partner. The bank was heavily exposed to government and the political elites. The asset quality was bad and non-performing. When Gono took over the bank was technically insolvent.
What has not been said about the much talked about turnaround is that under Gono, the government issued directives forcing state institutions to do banking with CBZ. Under such a scenario, the prospect of failing was non existent and anyone could have performed a miracle. With a politically active operator and a smooth talker, the bank’s fortune began to change for the better.
However, its operations were inextricably linked to the government and the bank began to perform quasi-fiscal operations and outside the RBZ became the largest source of government funding. Gono was the point man for not only fuel procurement but also the principal advisor and expeditor for the government. The bank’s fees were determined by him and government officials were afraid to challenge him lest they be exposed and flushed out of the system.
The bank was then privatized with the International Finance Corporation taking an equity stake in the bank. ABSA then also came into the picture with a strategic equity stake but with no control as control remained vested in Gono. With an iron fist, Gono controlled the bank as if it was his own and continued to enjoy the support of the government. For people who know Gono closely, they appreciate that he is a control freak and likes to be praised. At CBZ, he single handedly handled the transactions and he was accountable to himself earning a reputation that he was a close advisor of the first family not only because he was their banker, but because all ministers got their loans and toll fees through his facilitation.
In better understanding Gono, it is important that we also locate the role of Professor Moyo is repositioning him from a mere a banker to a broad-based state operator. The Professor appointed Gono as the Chairman of the Zimbabwe Broadcasting Corporation while Chombo appointed him to the University of Zimbabwe council. He was awarded an honorary doctorate degree from the UZ earning the title Dr. Gono. When Tsumba’s term as governor expired, the only viable successor who understood the mentality of government in terms of controlling economic behavior was Gono. Gono is a product of the state machinery and passionately believes that the state can solve all economic problems. Although he was operating a private bank, he acted more like a state actor than a market driven practitioner. While other indigenous banking executives chose to set up their own institutions, Gono remained under the state umbrella. It is also ironic that although the government was a large shareholder in Zimbank, the relationship between the bank and the government was not as close as that with CBZ.
When Gono was appointed Governor, it was obvious that he would not want to relinquish control of CBZ. Even when Barclays Bank acquired a controlling interest in ABSA, they were warned to keep their hands off CBZ confirming that Gono is still an interested party in eventually taking a controlling stake in bank in his personal capacity. It is no wonder that CBZ under Makuvise is like an extension of the RBZ.
However, the actions taken by Gono as Governor to which he is now being credited by the President are instructive. First he took charge of the economy placing the RBZ at the centre of all economic issues. He then started the state of the nation addresses under the guise of Monetary Statements. He then proceeded to put in place a range of fiscal and monetary instruments aimed at controlling the private and public sectors. Through the productive sector facilities, the RBZ became a primary banker to companies. Its interventions have expanded with each day. Although he promised that he was going to cure the inflation problem, inflation has increased to hyper levels under his watch. He also became the champion of the anti-corruption drive targeting specific individuals as a way of convincing his master that the source of Zimbabwe’s problems was a few individuals who were corrupt and had to be uprooted. He converted the RBZ into a police station and transformed externalization into a worse crime that homicide. He managed to convince Mugabe that it was not bad governance that led to the economic meltdown but a combination of the consequences of the land reform program and the so-called “illegal sanctions” imposed by the west.
The consequences of Gono’s reign are quite obvious to all but it appears that the President is oblivious to the real cost to the people of Zimbabwe and the region of misguided policies. It is an understatement that Gono’s policies are controversial and any rational thinking person would agree that they are misguided. The policies have included a fixed exchange rate, stringent and selective anti-graft measures and large-scale printing of money and such policies are bound to annoy not only the ruling party officials but any right thinking Zimbabwean. Imagine that under Gono, some exporters are given a preferential exchange rate while others have to be penalized with an artificial exchange rate.
While the President is grateful to Gono, Zimbabweans remain exposed to the most hostile economic environment characterized by an annual inflation at nearly 1 200% and critical shortages of foreign currency, fuel and drugs. Through Gono, the government continues to intimidate its enemies through trumped up externalization charges. He is the architect of all the nationalization schemes that have been put in place including the theft of my assets. With the encouragement of the President, there is no doubt that many well to do Zimbabweans will find their second home as either exile or prison. When he announces his Monetary Statement this week, it is not unexpected that he will focus on corruption and conspicuous private sector consumption that he believes is unacceptable for other and not for him and his circle of friends.
Through a combination of patronage and intimidation, Gono is now a feared man in Zimbabwe. He is effectively the CEO of Zimbabwe Inc. and has effective control of the state machinery and anyone who dares challenge him risks a lot. Even Parliament could not ask him how the RBZ managed to print money to pay the IMF and also managed to make it a secret for the nation. The suppliers of the foreign currency remain nameless and faceless and the exchange rate used will never be known. The role of the RBZ under Gono in undermining democracy and transparency is a subject that will require its own examination and assessment.
However, it is clear that the roadmap to a normal and functioning Zimbabwe will necessarily have to involve dealing with the RBZ and its governor. It is surprising that even the opposition politicians, with the exception of Tendai Biti, have not situated the RBZ as the biggest theatre where actions that threaten the existing and future generations of Zimbabweans are being perpetrated with active blessing of the head of state. One can only pray that the President will wake up to the fact that his own colleagues that have identified Gono as the root cause of the problems of Zimbabwe are actually pointing a finger at him.
Why would Gono become more unpopular than his principal who is supporting him even in the face of a dysfunctional economy? Could it be that within Zanu PF there are people singing the song: “Amazing Grace” where they were once blind and now they can see? Yesterday it was the Professor and now it is Gono. The real question is what are the people are saying about the President whose legitimacy ought to derive from the people who ultimately are bearing the brunt of bad governance? Will we ever get to the stage where accountability is located where it should be and culpability can then be correctly situated and managed?