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(ALLAFRICA) Zimbabwe: Mugabe Clashes With Gono Over Price Blitz

Zimbabwe: Mugabe Clashes With Gono Over Price Blitz
Business Day (Johannesburg)
Dumisani Muleya
Johannesburg
9 July 2007
Posted to the web 9 July 2007

THE political rift between Zimbabwean President Robert Mugabe and his principal pointsman on the economy, central bank governor Gideon Gono, widened at the weekend after the ruling Zanu (PF) resolved to "intensify and broaden" its price reduction blitz. Zanu (PF)'s central committee on Friday passed a Mugabe-sponsored resolution backing the government's fierce crackdown on prices. But in his first act of open defiance since his appointment more than four years ago, Gono opposed the campaign which has resulted in empty shop shelves across the country.

Gono is a fierce Mugabe loyalist and the president's personal banker. Up until the past week's rift, which has left the ageing Mugabe increasingly isolated, Gono was one of a few people in the country who still had direct access to the president and was touted by some as Mugabe's choice as heir apparent. Gono last week warned Mugabe that the price war, which is politically motivated and aimed at wooing voters in next year's critical elections, will drive the final nail in the coffin of Zimbabwe's already crumbling economy. Mugabe said on Saturday he knew that the private sector was trying to use economic pressure to ensure his defeat at the polls.

He has said that business is dramatically increasing prices as elections draw near as part of an "illegal regime-change agenda".

On Saturday, the party's highest organ, the politburo, and the national consultative assembly came out in support of the crackdown. Official inflation is now 4500%, although analysts say it is double that figure.

The row over the price blitz has exposed cracks within the government over the campaign -- executed unlawfully until the government rushed to legalise it on Friday, following reports of its illegality. It also threatened Mugabe's already shaky grip on power, political analysts said yesterday. Mugabe has publicly admitted that Gono has kept his beleaguered government going in difficult circumstances.

Since Gono's appointment in 2004, he has gained significant political clout and was instrumental in the dismissal of former finance minister Herbert Murerwa. He is in charge of the treasury, and runs almost all the key economic ministries.

Through the central bank , Gono has been printing money on a massive scale to fund essential state operations, the army, police and intelligence, and to procure food, fuel, production equipment , drugs and chemicals.

Gono has also baled out vital parastatals, which are all technically insolvent. He has been sent on numerous errands to China, Russia, South Korea and SA, among other countries, in search of economic rescue packages.

Last Tuesday, Gono wrote to Elliot Manyika, acting chairman of the cabinet task force on price monitoring and stabilisation, condemning the crackdown. Gono told Manyika that the clampdown was futile because it would not reduce inflation. He said a "holistic package of measures that would uplift the general supply of goods and services in the economy" was needed.

"I write to make recommendations on the ongoing efforts meant to stabilise prices in the economy," Gono said. "It is our strongest conviction that only through a holistic framework can we stabilise prices, without inducing shortages in the market."

Gono has also written to State Security Minister Didymus Mutasa, who chairs the joint operations command behind the blitz, saying he opposed the campaign.

This is said to have angered Mugabe, and left him considering firing his previously loyal right-hand man, a move that could spell more trouble for his embattled regime.

Labels: GIDEON GONO, ZANU-PF, ZIMBABWE

posted by MrK @ 4:29 AM