Parly reluctant to call Gono

via Parly reluctant to call Gono – DailyNews Live 25 September 2014 by John Kachembere

HARARE – Parliament’s portfolio committee on finance is surprisingly “reluctant” to call former Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono to help explain how the Bank’s debt ballooned to more than $1 billion.

In light of emotive views arising from countrywide consultative meetings and allegations that the former Central Bank chief was partly responsible for the fiasco, as well as strong calls for an audit of those obligations, it is unclear why committee chair David Chapfika says that they would rather talk to the current governor John Mangudya only and not to Gono as well.

“We will consider all the findings and if it is necessary we will invite the current RBZ governor… to give us some answers,” the ex-banker and Deputy Finance minister said.

“I don’t think it would be necessary for us to summon the previous governor (Gono) because when a new governor takes over there is usually a hand-over take-over and I am sure the new central bank governor is well aware of all the issues surrounding the accumulation of the debt,” Chapfika said.

With Mangudya barely four months in his new job — after Gono’s 10–year term — Zimbabwe’s main bank has once again been thrust into the spotlight as President Robert Mugabe’s administration tries to push through a bill to absorb the borrowings largely accumulated on behalf of central government.

Gazetted early this year, the RBZ Debt Assumption Bill proposes, among other things, the transfer and offloading of debts accumulated through quasi fiscal activities, and prior to February 2009’s dollarisation, to treasury.

Among the dues — largely accumulated to fund national essentials such as food, fuel and medicines — and owed to various local, and international suppliers are a $110 million institutional debt, $453 million in sovereign credit and $440 million in local debt.

Even, though, Gono’s management team takes its fair share of responsibility for the increase of the debt — through its quasi-fiscal operations from 2005 to 2008 — some of the institution’s debts are historical and date back to Leonard Tsumba, and even pre-independence days.

And when the former CBZ Holdings Limited boss undertook those “infamous” activities — under the guise of busting sanctions — he did so under the direction of Mugabe’s successive Zanu PF ministers, and government(s).

In 2006, Gono took the unusual step of publishing authorisation letters from ex-Finance ministers Herbert Murerwa and Simbarashe Mumbengengwi, and in a development which also gave a glimpse about the country’s economy was being run — and possibly how the debt was accumulated.

In financing most of activities, which precipitated the demise of the Zimbabwe dollar, the former RBZ boss used offshore lines of credit, cash raided from corporate and individual foreign currency accounts.

According to publicly available information, Gono has always had borrowing approvals of between $750 million and $1,5 billion a year, especially from 2005 and 2008.

In recent times, the chicken farmer has repeated the view — through a NewAfrican exclusive interview — that whatever he did had the blessing of his superiors or principals and was meant to deal with critical situations such as national hunger, and the cholera outbreak.

And while the Harare businessman has taken quite some “flak” for printing money, and increasing the Bank’s debts — as is emerging from the nationwide consultative process — there is a new school of thought that no one is “best suited to explain the debt hullaballoo than Gono himself”.

While Chapfika might have a valid point on the need to “respect the new RBZ order”, proponents of this idea to summon Gono insist it could actually enhance transparency and proper understanding of the issues at hand.