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Zimbabwe Crisis Reports No 10

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Zimbabwe Crisis Reports No 10 ZIMBABWE CRISIS REPORTS Issue 10 ■ July 2007 Fresh insights into the Zimbabwean situation END OF ROAD FOR CENTRAL BANKER? Gono likely to either resign or face the sack after his withering criticism of the president’s price-slashing move. By Norman Chitapi in Harare Reserve Bank governor Gideon Gono may not be in his post for much longer after apparently falling out with his patron, President Robert Mugabe. In a withering attack on the government’s June 26 decision to slash prices of basic goods by 50 per cent, Gono publicly warned last week of a boomerang effect, with companies shutting down because Lazele Credit: of losses. He painted a grim future of A trader sells sugar in one of Harare's high-density surbubs. Most of the products empty shops “leading us to needlessly that have disappeared from supermarket shelves have found their way onto the black draw spears against each other” as market. Picture taken July 10, 2007. people run out of basic necessities. official from the pressure group Crisis economic recovery in the near future, Mugabe has so far not commented on Coalition of Zimbabwe in Harare this which is very unlikely, would for them the statement by Gono, who is also the week. The official spoke in his be only a bonus.” president’s personal banker. However, personal capacity and refused to be it is the first direct attack by a senior named, lest his stance be confused When Gono took over in December government official on Mugabe’s with that of the coalition. 2003 as governor of the Reserve Bank policies. And analysts say Gono’s of Zimbabwe, he famously declared remarks mean he is unlikely to remain “Gono’s options are very limited “failure is not an option” when in government much longer. indeed,” said the official. “He can questioned about his capacity to either resign or stay on and be fired. resolve the country’s seemingly “We are seeing the beginning of the Mugabe and his colleagues are intractable problems. Last week, he all end for Gono’s roadshow,” said an concerned with political survival. An but accused Mugabe’s government of NEWS IN BRIEF ■ Government-imposed price 4,500 per cent, but financial ■ Women’s rights activists are controls which have emptied institutions estimate it is double that suffering increasing repression and supermarket shelves and petrol figure. torture, according to Amnesty stations will continue because they International. Members of Women of are bringing relief from “inexplicable ■ South Africa’s Democratic Zimbabwe Arise, a group which is in and astronomical” price increases, Alliance claims that between 5,000 the forefront of human rights President Robert Mugabe said this and 6,000 Zimbabweans are entering protests, have been arrested with week at the opening of parliament. the country legally every day, and it their babies, beaten and tortured. He told lawmakers that western suspects that at least another 1,000 sanctions, sabotage conducted by are coming in illegally. A delegation ■ President Mugabe announced Zimbabwe’s “political enemies”, and from the ruling African National this week that courses in corruption drought were jointly to blame for Congress found that 5,000 and the danger it poses to the the country’s economic crisis. Year- Zimbabweans were arrested in July economy will form part of the on-year inflation is officially put at while trying to enter South Africa. curriculum in Zimbabwe schools. JULY 2007 ■ 1 THE INSTITUTE FOR WAR AND PEACE REPORTING stabbing him in the back when it If Mugabe fires Gono, he faces a sanctioned land invasions, which he launched a blitz on businesses for backlash from his colleagues in the said disrupted the nation’s economic alleged “profiteering”. Southern African Development backbone, the commercial agricultural Community — however, that is unlikely sector. It was a criticism he had been The Crisis Coalition official said Gono to stop him, continued the official. making publicly since 2005, five years felt gravely betrayed by the government after the land invasions began, and after he came in “as the knight in “In terms of national policy, they are when most of the land had been shining armour” to get the country out of worlds apart. The time has almost parcelled out, either to government an eight-year downward spiral. come for them to part ways if Gono officials or to landless “war veterans”. wants to save some modicum of When Mugabe appointed Gono as credibility as a professional,” he said. Gono also attacked government Reserve Bank governor in 2003, he also “In political terms, he will have to look spending, the huge budget deficit and attacked Gomo’s precedessor, Leonard for sanctuary in one of the factions — corruption, all of which frustrated the Tsumba, for following textbook either in the divided opposition or those battle against inflation. He has long economics by refusing to print money as in ZANU-PF who believe in the efficacy favoured a free exchange rate for the and when it was needed. Mugabe said of his policy recommendations.” local currency, which is pegged at 250 he wanted somebody who understood Zimbabwe dollars, ZWD, to one US the country’s unique situation in the face ZANU-PF is divided into three major dollar. This is against the more realistic of western sanctions which he claimed factions. One supports Mugabe’s sole black market rate of more than were being orchestrated by the former candidature in the presidential election 100,000 ZWD to one US dollar. Gono colonial power, Britain. next year; the other two are fighting each said government’s unrealistic rate had other to replace the party’s 83-year-old caused “pricing distortions and Gono had so far been complying with leader. Gono is said to be aligned with instability” in the market. Mugabe’s brand of economics, but the the faction led by Politburo member and latest crisis has seen battle lines Rural Housing Minister Emmerson Over the past three weeks, police drawn between himself and his patron. Mnangagwa, against that led by retired have arrested some 1,700 company The central banker said attacks on army commander General Solomon representatives for failure to comply businesses and blanket price controls Mujuru, the husband of Vice-President with its decree on prices. Shops have imposed by government on June 26 Joice Mujuru. Both Mnangagwa and been looted while most fuel service and enforced by state security Mujuru accuse Mugabe of ruining their stations are dry. agencies were “ruinous”. business interests. Opposition leaders and captains of “It is critical that urgent steps be taken to The ZANU-PF politician said Gono had industry have accused Mugabe of deal with the supply side imperatives wanted to build his future political adopting populist policies to win over without which, or failure of which, will career on the back of a successful voters ahead of next year’s first joint leave the country in a worse-off economic revival programme. presidential and parliamentary elections. situation,” said Gono in a letter The MDC has threatened to boycott the addressed to Mugabe, which was “Reducing inflation to a single digit as ballot if there are insufficient electoral law leaked to the press. He accused he had set out to do at the beginning reforms to ensure free and fair voting. government of not having a plan of how would have been a good entry point to maintain production at the prices it [into politics],” he said. “This would The leader of the main faction of the was forcing businessmen to maintain. have put him ahead of competition in MDC, Morgan Tsvangirai, called the “We need to define clearly at what point ZANU-PF and in the [opposition] price cuts an “election gimmick” to we will exit from the current blitz,” he Movement for Democratic Change as buy votes — but Mugabe sees the said. well. Now he realises that his political recent daily price increases as ambitions are being ruined before he business’s attempt to engage in the A senior ZANU-PF official opposed to has made them public.” politics of regime change. Mugabe’s latest assault on business said Gono and Mugabe had never Gono’s litany of complaints about the Mugabe has in the past accused before been so sharply divided. “Gono government, which were leaked to the business of sponsoring the MDC. Now, has been Mugabe’s personal banker public, could be an attempt to regain analysts say, he has found an and financial advisor for many years some credibility ahead of ZANU-PF’s opportunity to hit them where it hurts — since he was chief executive officer special congress in December. most — the pocket. But, the analysts at the Commercial Bank of say, Mugabe might have shot himself Zimbabwe,” said the official, who In his letter to Mugabe, Gono said in the foot, for the resulting shortages asked to remain anonymous. “He is there was need to respect private will hurt him and his party in the perhaps the only person who knows property and for policy consistency to elections next year. and fully understands the nature of attract foreign investment, which would Mugabe’s finances, but now they are generate much needed foreign Norman Chitapi is the pseudonym of sharply divided on national policy.” currency. He attacked state- an IWPR journalist in Zimbabwe. ■ 2 ■ ISSUE 10 ZIMBABWE CRISIS REPORTS POST-MUGABE QUANDARY There’s little consensus amongst analysts over who should lead the country once Mugabe finally goes. By Benedict Unendoro in Harare As the Zimbabwean crisis deepens, analysts are already exploring which political party would be best equipped to turn around the country’s fortunes in the post-Mugabe era.
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