FINANCE minister Herbert Murerwa and Reserve Bank governor Gideon Gono, the country’s key economic managers, have clashed head-on over policy issues
as the economy continues to slide. Gono says their relationship has become “untenable”.
The battle between Murerwa and Gono exposes widening fissures in government over critical policy matters.
Documents in the Treasury department reveal that Gono at one point wanted to resign due to political pressures although last month he changed his mind and decided to stay-put amid mounting hostility.
A seven-page letter written by Gono to Murerwa, dated February 6, details fierce run-ins between the two, usually following visits from the International Monetary Fund. It also shows the governor’s angry reaction to the minister’s accusations that he was acting outside his jurisdiction by venturing into quasi-fiscal activities instead of confining himself to his monetary policy mandate.
“Minister, I had earlier on opted to tender my resignation from the post of governor so that you can appoint your own governor as they say in the Finance ministry ‘corridors’,” Gono wrote to Murerwa.
“I have decided, however, not to go that route for to do so is to accept defeat, a thing I will not do. I will not resign. Never, but you can fire me if you so wish. To be honest I now do not know anymore whether we are working for the same government.”
Murerwa replied on the same day insisting that Gono was operating outside his mandate. Sources said ministers have accused Gono of acting like a “prime minister” and of running a parallel government bureaucracy at the central bank. Gono wrote back to Murerwa on February 13 maintaining his ground.
This created a see-saw battle between the two which is continuing unabated, sources say.
The Zimbabwe Independent reported on May 6 last year that “knives were out” for Gono to leave due to policy differences and Zanu PF power struggles.
The conflict — a reflection of the raging Zanu PF succession battle — has been brought to President Robert Mugabe’s attention and is being dealt with at the highest level of government. The two officials have met Mugabe separately over the issue.
Murerwa has accused Gono of conducting his duties without due consultation and without his approval as the responsible minister. This has led to clashes between them, especially over the IMF issue.
The minister has also blamed Gono for printing $46 trillion to “dish out without” to government and private-sector projects. The $21 trillion printed to pay the IMF arrears now features in their quarrel.
Gono explains in the letter that when he was approached to be governor he was given the powers to make the decisions he had taken in pursuit of economic recovery. He said a meeting between Mugabe, Murerwa and himself on
He said he had always acted with the direction of the presidium, cabinet, parliamentary subcommittees on economic affairs, as well as private-sector stakeholders.
Gono said this was how he came to financially support parastatals, local authorities, agriculture, food and fuel procurement, embassies, the ministries of defence, home affairs and “sensitive state security organs”, as well as pay the IMF US$210 million.
He said he had also made money available for the “urgent refurbishment of sensitive military establishments”, elections, building of infrastructure such as dams, upgrading of airports, railways, power stations, state farms and other critical operations. Murerwa’s claims, Gono said, came as a “devastating shock” to him.
“Now, on the advice of your trusted ministry officials, you want to turn your back on us when in fact they were not there when you gave me a ‘nod’ to do these operations,” Gono said in the letter.
“Minister, for you to say that you were not being consulted is to forget the numerous meetings we have had with both VPs (vice-presidents), economic, social and parastatal ministers. I, therefore, feel deeply let down by now being viewed as having ‘dished out’ $46 trillion ‘without approval’.”
Gono said his current working relationship with Murerwa had become “untenable, particularly in an environment where the fiscus chooses to be theoretical about its budgetary frameworks, without due focus being accorded to the peculiarities of the challenges confronting the nation”.
Gono said he did not understand why “each time the IMF comes into or leaves town we end up in serious disagreements”.
The two have fought over the IMF, with Gono pressing for the clearing of arrears while Murerwa was opposed to printing money to do so. Murerwa was also opposed to printing money for any other purpose.