Wednesday, 4 December 2013

Gono's Departure from the Reserve Bank No Simple 'Goodbye to All That'

By Takura Zhangazha

The resignation of the Governor of the Reserve Bank of Zimbabwe has been a rather muted affair. Not for lack of media coverage. But more for lack of analysis of the complex and controversial nature of Mr. Gono’s tenure in office as governor of our central bank.  No doubt, he has been a larger than life character in our country’s political economy.

Whether one begins by remembering his meteoric rise to influence in our country’s banking sector as the head of the Commercial Bank of Zimbabwe (CBZ) or alternatively his ascendancy to the Chairpersonship of the University of Zimbabwe Council.

The latter position was his prelude to the post of topmost financial advisor to the central government as Reserve Bank Governor. An appointment that saw him begin to have a profound and controversial influence on our national economy.

And it is a correct thing to analyse his track record, primarily as Governor of the Reserve Bank  in order to understand the influence he has had on Zimbabwe’s economic fortunes.

Whatever assumptions that can be made of his individual character, his departure from the central bank has been rather muted or alternatively under-analysed.

The truth be told, our former Reserve Bank governor had a profound impact on Zimbabwe’s national political economy. Whether one recalls the acronyms such as Foliwars, or even the Bearer Cheques, his elaborate quarterly monetary policy announcements and his somewhat forgotten book, ‘Zimbabwe’s Casino Economy’ he was never intended to go out with a whimper.

Hence it has been reported in some sections of the main stream media that he has been earmarked to replace the late national hero, Kumbirai Kangai, as a proportional representation Senator in Manicaland province. 
In writing about the outgoing governor, I am aware that there will be a lot of eyebrows raised on the veracity of my personal opinions. But what cannot be skirted is the fact that he has been an important political and economic player in Zimbabwe’s  last decade. Therefore  I would not be remiss to analyse the full import of his legacy.

I first knew him in his capacity as Chairperson of the University of Zimbabwe Council which he administered with the not so able assistance of an Australian expatriate veterinarian Professor, Graham Hill. It was under his tutelage that the 50% fees policy was implemented by central government and by default paving the way for the now existent privatization of the University of Zimbabwe  (which has eventually and by default, again, become a model for all new universities to be established by government)

What was evident during that time was that he was viewed as a rising star, together with the likes of Enock Kamushinda who also sat on the UZ Council. They were viewed as the sort of entrepreneurs the country required because they were apparently world-wise, savvy and probably knew how to do good by government. Especially if they could talk big economics and business related ideas that government was desperate for at a time of austerity and Economic Structural Adjustment  in the mid to late 1990s.  

They were a competitive lot these youngish entrepreneurs, and were very ambitious in  a free market economy way. Unfortunately in Zimbabwe at that time (probably in present day) ambition and ideas could only be recognized by proximity to the state, hence the early flirtations with state institutions.

As they say, the rest can be considered history but for now, Dr Gono’s primary legacy as Reserve Bank Governor  will always remain that of having presided over the iconic fall in value of the Zimbabwe dollar. Even if he was supposed to be ‘Mr.  Fix It’. 

This, together with the  infamous bearer cheques that signaled the certain demise of the local currency and aided a parallel market in foreign currency exchange. It also led to the expansion of informal employment via foreign currency exchange dealers who relied on a network of  mafia style local money barons rumored to be closely linked to the Reserve Bank. These informal traders were to live fairly affluent lives for a while until the introduction of the multi-currency policy by central government.

The central bank also began to act more Prime Ministerial through dealing with matters beyond its ideal fiscal mandate.  Hence it rolled out what in all our local languages has come to mean slang for ‘plenty of goods for free’. This was the national programme titled Bacossi (Basic Commodity Supply Side Interventions). The jury is still out on the impact of the latteron  people’s lives during those bleak economic years, but the reality of the matter is that it, like with other RBZ projects, created a complex system of patronage accompanied by rumours of cronyism in how it was being implemented countrywide.

With the advent of the inclusive government in 2009,  the governor was to become both an ‘outstanding issue’ for the opposition MDC-T and a less influential policy maker.  He however has outlasted the inclusive government as well as those that passionately sought his ouster from office since 2009. (It has been rumoured that he has since become good friends with most of those in the opposition that sought his ouster.)
His influence on Zimbabwean society was however limited largely to the monetary policy and only as a bit part player focused largely on the banking sector as well as assisting in preventing the latter’s immediate indigenization.

In the final analysis, the former Governor of the Reserve Bank served at the pleasure of President Mugabe (as he would often say) and his mistakes or achievements cannot be his alone. It was broad government economic policy that failed the people of Zimbabwe. The outgoing governor however played a key part in the architecture of the economic crisis. Whether history absolves him is not for me to judge.
*Takura Zhangazha writes here in his personal capacity (takura-zhangazha.blogspot.com)