Comment: It’s The Politics Stupid!

REAPPOINTED central bank governor Gideon Gono will still find it difficult to endear himself with key players in the economy even after announcing this week that he will cease all quasi-fiscal activities (QFAs)

and concentrate on the core business of the Reserve Bank — controlling inflation and policing the financial sector.
His opponents say the QFAs are responsible for propelling inflation into the stratosphere, decimating the local currency and ravaging the economy. Despite serious petitioning and lobbying by the opposition MDC and business leaders to have Gono taken out of the Reserve Bank, President Mugabe renewed the governor’s tenure this week. The renewal of Gono’s term is definitely going to annoy business and the MDC-Tsvangirai, especially its secretary-general Tendai Biti who at one time described Gono as an economic terrorist.
There is no doubt that the MDC-Tsvangirai — which is angling for the Finance ministry in the proposed unitary government — is not prepared to work with Gono. On Wednesday MDC leader and Prime Minister-designate Morgan Tsvangirai fired warning salvos at Mugabe over the reappointment. Tsvangirai said the renewal of the term showed “lack of good faith”. He denounced Gono as “the architect of Zimbabwe’s economic collapse”. He said Gono “has blatantly plundered the national treasury to fund Mugabe’s party and its elite”.
Even in a lesser role Gono’s reappointment is set to open yet another front and heighten conflict between Zanu PF and the MDC. He is now a political battlefield on which the feuding parties will contest for power and influence. There is already a battle raging  between Mugabe and Tsvangirai over appointment of Zanu PF provincial governors in areas the MDC dominated in the senatorial and parliamentary polls. Mugabe’s appointment of Gono is a controversial undertaking. Gono is now in an invidious position in which he will always be viewed as a symbol of Mugabe’s defiance and his dead man’s grip on power.
In this battle, Gono has to make difficult choices of openly proclaiming allegiance to the failed Zanu PF aristocracy or assuming a more neutral position which is in line with his new pronouncements of sticking to core business. But he will always find it difficult to disentangle himself from the cobwebs of the Zanu PF conundrum. In fact his activities at the central bank are going to be determined by the politics in the country.
As long as there is no political settlement, Zimbabwe will not get balance-of-payments support and production in industry and on farms will remain depressed. In that case the government will continue pressing Gono to run the printing press. Gono should be aware that the solution to eliminating the cash economy and resultant money supply growth is beyond his capabilities. At the beginning of his first term as governor, he took the battle to fight inflation as a personal struggle which he wanted to win at all costs. He made bold declarations about the perils of losing the battle, the most famous one being “failure is not an option”.
That he has lost the battle — and the plot — is very evident but we will not fault his religious zeal to want to see inflation brought down to single digit levels. Even after declaring that he would avoid QFAs, his statement this week does not disguise the fact that he still wants a piece of the action. He wants to see growth in mining and other foreign currency generating businesses.
He wants to see Zimbabwe attract foreign investment and to ensure developmental projects take root once more. Gazing into the horizon he said: “The outlook period will see an unprecedented vigour in mobilising foreign exchange through the strategic deployment of the country’s natural resources, as well as those parastatals’ assets and shareholdings that are amenable to private sector participation.”
But he has to mend fences with miners, especially gold extractors whom the central bank has not paid for gold deliveries. The same goes for maize and wheat farmers who were promised payment in foreign currency for deliveries to the Grain Marketing Board. Exporters and a large section of the banking industry will also not celebrate his reappointment. Depositors queuing for the worthless $500 000 at banks do not have kind words for Gono either.
 The soiled image of Zanu PF has rubbed onto him and he has an arduous task to launder that. In the event of the unitary government succeeding, Gono has a huge task to remove the tag of unwanted governor in government circles. Judging by the current state of this economy and the task to hand, it will be difficult for Gono to save Zanu PF from political demise. He was appointed as the face of change in the Zanu PF administration five years ago but was immediately handed a poisoned chalice. He gulped it down and his image as change agent quickly evaporated. Can he rise above the zeros to be a trusted handyman?

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