Gono rejects bid to halt currency reform

Dumisani Muleya



RESERVE Bank governor Gideon Gono has resisted attempts by the National Economic Development Priority Programme (NEDPP) to delay or reverse the implement

ation of the new currency measures.


Government sources said this week Gono rejected an NEDPP decision to suspend or reschedule the implementation of the removal of three zeros from old bearer cheques he announced in his monetary policy statement on July 31.


The proposal to postpone the new currency was made by senior NEDPP policy implementation officials from economic ministries who rushed into a meeting shortly after Gono’s presentation.


NEDPP officials argued that most banks were not ready for the new currency policy and needed time to reconfigure their systems.


Senior government officials who attended the NEDPP meeting to discuss the new currency measures include Finance minister Herbert Murerwa and his Economic Development counterpart Rugare Gumbo.


Sources said Murerwa and other ministers were not happy with the issue because they were not fully consulted.


Although Murerwa was said to have been aware of the move, the majority of his colleagues were not. The NEDPP is a government action plan premised on the need to stabilise the currency in the short-term through quick-fix strategies. It is understood that after the NEDPP meeting it was communicated to Gono that he should reconsider his move but he rejected this.


“The NEDPP met after Gono’s statement at the urging of bankers and came up with a decision to delay or reverse the new measures,” a source said.


“The NEDPP then communicated the decision to Gono who rejected it outright and instead went on a nationwide campaign to explain his currency plan. That is why Gono went to Bulawayo, Kwekwe and was also expected to visit Chinhoyi, Bindura, Marondera, Mutare, Masvingo, and Gwanda — in other words all provincial capitals.”


Gono went to major banks in Harare on August 1 to explain his moves and to secure assurances that financial institutions would facilitate the transition from the old to the new bearer cheques.


The coming of the new bearer cheques is riddled with controversy as the central bank, backed by state security agents and police, seizes money from individuals and companies. The nationwide crackdown on alleged currency stashers has netted thousands and government claims to have recovered trillions of dollars.


However, there has been loud criticism of the brash approach of the law enforcement agents to the operation which was given legal force by emergency presidential powers.


Lawyers have said the operation may well be illegal in constitutional terms.


Sources said Gono refused to accept the NEDPP proposal because he had agreed with President Robert Mugabe, army, security and police chiefs, and Murerwa himself on the currency initiative.


Sources said Gono had met Mugabe, security service bosses and Murerwa on July 30, the day before his monetary policy statement, to explain his currency reform plan.