FOLLOWING the appointment of former Reserve Bank of Zimbabwe governor Gideon Gono (GG, pictured) as board chair of Special Economic Zones (SEZs), Zimbabwe Independent political reporter Hazel Ndebele (HN) interviewed the businessman to ask him about his new role and challenges likely to affect his work. Find excerpts below:
HN: President Robert Mugabe has complained that the Chinese, who were involved in diamond mining in Chiadzwa, short-changed the country with billions of US dollars allegedly unaccounted for. Given the government’s Look East policy and China being the kingpin of that policy and the West not forthcoming, what is the SEZ position regarding investment attraction?
GG: We will approach our mission to attract investors to Zimbabwe based on Dengism Philosohy from China’s great leader Deng Xiaoping: the first one is what he said about the transformation of the Chinese economy. He said “it doesn’t matter if the cat is black or white, so long it catches mice”.
The second teaching is “seek truth from facts” and you will make correct decisions. Zhu Rongi, the ex-Governor of the People’s Bank of China who actually spearheaded the transformation of China to the modern economy it is today, also has many lessons to teach us on how to transform a difficult economy with rampant corruption, company closures, joblessness and lack of foreign investment into a vibrant, modern and attractive economy for investors.
HN: Economic experts say it is difficult for a SEZ to succeed in an environment where investors lack confidence in economic policies, how is your board going to ensure that the SEZ will succeed? More so how is it going to ensure that Zimbabwe has investor friendly and consistent policies?
GG: To start with I have difficulty with this concept of economic experts. If we had such economic experts on planet earth, countries from were those experts hail would not be in difficulties … Anyway, I also agree that in an environment where confidence is lacking, it is not easy.
My board has never said that it is going to be easy neither has anyone in Zimbabwe said it is going to be easy. If it was easy there would not be need for it in the first place. But my board cognisant of all the challenges that have beset this economy historically, currently and likely to beset the economy in future will not shrink from the determination to ensure that all players in the economy act and behave in a manner that restores confidence. Confidence in an economy stems from various factors and I will confine myself to the issues of consistence in policies and so on.
Honourable minister of Finance Patrick Chinamasa has spoken at length about the need for policy consistency. The World Bank has also spoken about it and the International Monetary Fund has also spoken about it and virtually everybody. The 10-point plan, ZimAsset and all other national programmes upon which the SEZ programme is anchored, are committed to policy consistency, but the taste of pudding is in the eating isn’t it?
In my engagement with various ministers responsible for policy, I have been heartened by the manner in which everyone is determined to do their bit to enhance the country’s recovery.
HN: You have previously said that a one-size-fits-all approach to indigenisation does not work. What do you think is way forward on that issue?
GG: I have not shifted from my position that I held since October 1 2007. That position is well-articulated, well-known and well-written about. SEZs Section 56 subsection 1 deals with that aspect and it exempts compliance with that requirement on the part of occupancy in the SEZ, although that does not mean that locals should not participate on their own or in joint ventures with foreign investors in SEZs.
It always makes sense for any investor to work with locals, but locals who add value to the economic venture. I am on record as saying SEZs are not platforms for freebies, they are not platforms for intimidatory tactics, not platforms for laziness and not platforms for corruption.
HN: Given the wavers such as tax-free and duty-free for those investing in SEZs, how are you going to curb corruption and make sure that preference to invest is not only given to those politically connected?
GG: Well, first and foremost, Zimbabwe’s SEZs are going to be corrupt-free zones. You can actually substitute special economic zones for corrupt-free zones. The men and women that constitute the board may not be direct descendants of St Peter, St John and Mark, but they are committed to seeing a corrupt-free special economic zone regime.
HN: You recently stated that your board has met three or four times since its appointment. Is that not an overkill? What is driving this zeal and frequency? Is your board not sitting frequently to maximise on sitting allowances which will further burden the already burdened fiscus space where government’s wage bill is taking over 90% of its revenues?
GG: Isn’t it ludicrous that many boards are accused of not meeting enough times to discharge the business for which they were appointed and yet here we are, my board is leaving no stone unturned to hit the ground running and the result: preposterous suggestions and brickbats! Well, let it be known out there that my board has no apology to make to anyone regarding its energetic, patriotic and meticulous approach to the setting up of this very brand new institution and how many times it needs to meet is a function of the chairman, its corporate governance needs, its strategy and its strategy, mission and vision all of which are provided for in the Act.
As for sitting allowances, you may want to know that apart from the provision of a boardroom at the ministry of Macroeconomic Planning and Development for our meetings, government has not yet provided any penny to SEZ or board members, including those coming from as far as Bulawayo. Everyone is still using own resources for this important work and will be reimbursed when the authority gets money. The idea that work should stop until money is found is not in keeping with the philosophy of my board whose overriding concern is to deliver on its mission.
Besides, really, apart from reimbursement that will be supported by authentic vouchers, as chairman, I personally will not be seeking to withdraw or get any board fees for my first term of office, but, if re-appointed for a second three-year term of office, after leading the board to deliver on its first term of office, then I will, if the authority can afford it, claim my pound of flesh for the next round of services. You must understand that most of us on that board are already established business people and although we are putting in a lot of personal hours away from our businesses, we do not depend and have not depended on board fees from government for our daily bread.
HN: Last week you met with minister Chinamasa. We understand that the meeting was the first since you left government about four years ago. What was discussed and how did both of you react to the meeting?
GG: I read “mischief” in the latter part of your question so I will not answer that part. That the board of SEZ met the minister of finance is a fact in the public domain and not a secret. The minister of finance is a critical factor in the success or otherwise of the SEZ model. He gives the fiscal incentives. He is the one in charge of the economy and guides everyone on matters finance and economic.
HN: When you were RBZ governor, your mantra was “failure is not an option”. Did it become an option in the end and related to that, what is going to be your mantra in your new position at SEZ?
GG: Failure has many definitions, so is success. I believe when historians come to write about the most trying economic times of this country and take into account the forces that were pitied against this country and the period of those difficulties as epitomised by the George W Bush and Tony Blair combination, a fair judgment will emerge about how this country managed to survive such onslaughts when such countries like Portugal, Italy, Greece and Spain went on to their knees in less than six months of facing turmoil without illegal sanctions. How many years have we gone facing illegal sanctions, but we are still standing despite the hardships we are facing? Where is Libya and its ruler today? Where is Britain, its governor and the EU today? Those in office then and today, including Blair and Bush, know what economic gymnastics and game of thrones Zimbabwe had to play with the West in order to survive. But those were the days.
I now see a desire to open a new and progressive chapter with the business-oriented administrations of most Western nations, the East, North and South whose individual and collective entrepreneurs and business entities we are ready to welcome. We read a renewed spirit of “homeism”and “home is best” from the many Zimbabweans in the diaspora who have contacted me with enquiries of how to participate in the SEZs. As for the operating mantra, it shall be summarised by Dengism. We are looking for cats that catch mice regardless of colour, creed, origin or gender and we shall seek truth in facts!
HN: It is all very well to talk like that, but what sway do you have over politicians who make policies? Has politics not been the real elephant in the room?
GG: By the way, not all “isms” are bad or negative. We like “patriotism”, and like Dengism, we like pragmatism, progressive and capitalism, liberalism as drivers of our journey towards attracting investment to the country. There must be, as a nation, areas we “must agree never to disagree” on such as the absolute necessity for investment in our country, the need for full employment in our country, need for peace, stability, law and order in our country, the need for food self-sufficiency, good education, health, housing, efficient transport and economic diplomacy so we live well and trade with other economies of the world. These are things we must never disagree on in terms of necessity as a people regardless of political affiliation, region we come from, gender or political faction. It’s called nationalism. This is one “ism” we need in the country, within political parties, churches and the Zimbabwean society as a whole.
Our mission will be made easier if our politics, the elephant in the room as you say, could be tamed to hear no evil, seen no evil and speak no evil about our national progress. We mean no harm to anybody, political or otherwise, by seeking to have this economy take off again. ZimAsset and the 10-Point Plan announced by the President and the SEZ law are therefore the tools that we have for swaying anyone going against the spirit of these documents in as far as our work is concerned.
HN: Banks seem to be holding their own in this volatile economic environment. As former Reserve Bank governor, what do you attribute that to?
GG: It is resilience. The men and women who are running our financial sector are tried and tested. They are the stalwarts of the banking industry, they are capable of holding their own in any environment and so I have the privilege of either supervising them or working with them and I have a lot of confidence in them, so I am not surprised they are holding their own even in the most challenging of conditions.
HN: What do you think are the causes of the liquidity crunch and the cash crisis? How can it be resolved?
GG: Well, the subject of liquidity, cash crisis, is a subject that requires a separate interview. To start with, I can refer you to Number 80 Samora Machel, the 22nd floor where the governor seats, if you do not find joy there then you can come talk to me, but the first port of call is Dr (John)Mangudya.
HN: At the personal level, can you shade light on rumors that you sold your stake in the Financial Gazette newspaper and also, given your new position, are you going to contest for a parliamentary or senatorial seat in the 2018 elections as rumoured in some circles?
GG: I can confirm that we have significantly reduced our stake in in the Financial Gazette and no longer have any say in what goes on there. Sad for us as a family, but such is life.
On the other question, please do not work on rumors. Work on facts. “Find truth in facts,” says Deng.
I have a very challenging national assignment to assist government in the turnaround of our economy through SEZs. That’s my forte and I enjoy challenges of that nature. Though it is non-executive, I’m learning new things every day and enjoying the demands from the assignment as well as freedom to pursue my personal family business which suffered from neglect during my days of full-time engagement with state assignments.
My position as chairman of SEZs is apolitical, serving all corners of Zimbabwe where opportunities exist to create employment, generate or save foreign exchange, while creating new industries to beneficiate our agro-mining and other industrial/commercial activities, and I am happy to be serving the nation in that capacity.
l For the longer version of this interview, visit our website on www.theindependent.co.zw