Monday, March 17, 2008

Gono turns Reserve Bank into "Elect Mugabe" Bank

Of the four candidates in the Zimbabwe presidential election due in two weeks, former finance minister, Dr. Simba Makoni, is the only one who has made it clear that, among his immediate tasks in office, would be to “examine and define the mandate of the Reserve Bank of Zimbabwe and its relationship to the state.”

He stated in his election manifesto that he would “restore the autonomy of the Central Bank as a regulator.”

It is not surprising why Makoni would prioritize a re-look into the workings of the Reserve Bank which has been transformed by incumbent governor, Gideon Gono into anything but.

A Central Bank is universally defined as an entity responsible for the monetary policy of a country. Its primary responsibility is to maintain the stability of the national currency and money supply.

The RBZ, under Gono, has failed to fulfill its mandate. It is common knowledge now that the monetary policy of the RBZ has been consistent on printing and dishing out useless bearer cheques to the nation, a function that nobody would find easy to classify as a role for a Central Bank.

As for the primary responsibility of maintaining the stability of the national currency and money supply, well, reality suggests that has not been practiced either, with the USdollar exchanging at more than ZD 30 million and inflation at more than 100,000%.

The RBZ has also been involved in black market currency transactions, something tantamount to a policeman joining thieves instead of arresting them.

But these are the obvious failings of the RBZ that Gono may even defend successfully to those who sympathize with his self-made situation.

What is really worrying – and even embarrassing – is how Gono has transformed the RBZ into an “Elect Mugabe Bank”, with departments to supply farming equipment and rural transportation.

The RBZ is directly involved in funding and active distribution of tractors, ploughs, scorch carts and other implements under a project called the Farm Mechanisation Programme.

It’s a project specially designed and timely introduced to begin at the same time as President Robert Mugabe is seeking a sixth term in office. Last week, in an interview with The Financial Gazette, one could feel the glee in Gono’s words as he proudly enumerated the thousands of tractors, ploughs harrows and other implements the programme is offering to farmers.

Ironically, Zimbabwe has an agricultural bank, but nothing is heard of it in the programme which should really be within its mandate. But the Reserve Bank, together with its governor, has become a personal tool of Mugabe’s and no prizes for guessing who will benefit from the implements.

As if that is not enough, the Reserve Bank is also in the forefront of funding and implementing another “Elect Mugabe” project; the so-called National Transport Enhancement Programme under which Mugabe and his surrogates are going round the country donating buses, 35 for each of the country’s 10 provinces.

What boggles one’s mind is that Zimbabwe’s rural transportation system has always been a private enterprise affair and never before has the government been required to provide buses.

Nobody knows who will administer the buses and under what statute. All we know is that Mugabe said the buses will charge affordable fares, by whose definition, we don’t know.

But is a direct role by the RBZ necessary? Where is Gono getting the money to embark on all these schemes, including a “Food for Votes” programme that has gone awry as nobody wants to load the maize in Zambia.

But I digress. My issue is with the RBZ being on the forefront of an election campaign on behalf of one candidate. This can only happen in Zimbabwe.

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