All my actions above board: Gono

All my actions above board: Gono
Business Editor Victoria Ruzvidzo

RESERVE Bank of Zimbabwe Governor Dr Gideon Gono has dismissed reports that he has been running a parallel Government, stressing that everything he did was legitimate and within the confines of the Reserve Bank Act.

Addressing Members of Parliament in Harare yesterday, Dr Gono said it was unfortunate that those bent on criticising him had not researched on the functions of the central bank as laid out in the Act.

"I have been amused to read in the media that the central bank has been working as a parallel Government between 1 December 2003 and 31 March 2009. If indeed we were running a parallel Government, how come 75 percent of our advice was not implemented?

"If it had been implemented, we would not be in the situation that we are in now.

"Also, if 25 percent of what we did had not been done, we would not be where we are today . . . it would have been worse," he said.

He took parliamentarians through some sections of the RBZ Act, particularly Section 6 (g), which says the functions of the central bank shall be to act as a banker and financial adviser to, and a fiscal agent of the State; and 6 (l), which empowers the Reserve Bank to exercise any functions conferred or imposed upon it in terms of the enactment.

Dr Gono said he was also guided by Section 8 (2) which states that "nothing in this section shall prevent the State from carrying on transactions in such manner as the State may require and, if so requested by the State, the Bank shall make the necessary arrangements to this end".

"People forget what they legislated. You (MPs through the RBZ Act) said to me ita zvese zvese as long as takuti ita. So that is what I have been doing. You don’t shoot the messenger," said Dr Gono.

He said in discharging his duties, he took instructions from his principals, which instructions were made and implemented in terms of the relevant laws and the Constitution of Zimbabwe.

The central bank and Dr Gono in his personal capacity have come under fire for engaging in quasi-fiscal operations, money-printing and other interventions that were said to have fuelled inflation and worsened the economic situation.

Criticism has centred on such interventions as the Agricultural Sector Productivity Enhancement Facility, Basic Commodities Supply Side Intervention (Bacossi) and Farm Mechanisation Programme as areas outside the central bank’s jurisdiction.

Dr Gono yesterday said every parastatal, local authority, ministry, the media, the judiciary, law enforcement agencies, civil society and all sectors of the economy had benefited from the quasi-fiscal operations.

Some of the interventions, particularly in agriculture, were adopted from recommendations in the Utete Land Audit Report, "which we saw fit to pick out and implement".

"All that we did, however, was authorised, transparently reported upon at different platforms and appreciated by all beneficiaries, including by those who today hold different views in public," he said.

These were done within the confines of the central bank having been appointed by Government as the "point institution" to lead the fight against socio-economic challenges the country faced.

This meant that the scope and platform of the central bank operations would become less defined, less confined and "less understood by the generality of the stakeholders".

It operated under a strategic umbrella of "necessary ambiguity with constructive intent".

"Keeping in mind that parallel lines never meet, setting up and running a parallel Government, as alleged in some propaganda circles favoured by certain sections of the media, would have meant turning the Reserve Bank of Zimbabwe into a sovereign superstructure in opposition to and in competition with the State and Government headed by His Excellency President Robert Mugabe.

"The records will show that nothing of the sort ever happened or could happen, not least because the real fact that is obviously conveniently ignored in the various debates on the role of the Reserve Bank in the formulation and implementation of monetary policy under my watch is that for the first time in the history of our country, the bank was singled out and selected by the State and Government of the day to be the ‘point institution’ to address and ameliorate the extraordinary circumstances which engulfed the country."

Zimbabwe was going through an economic war and "when you are at war, you cannot ask for transparency in some instances".

He said he had been working in the trenches from 1998, well before he was made central bank governor, as he sought to ameliorate the challenges that beset the economy.

Some of his missions included sourcing

All my actions were above board: Gono

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fuel, maize, wheat, lines of credit and other critical national requirements.

As governor, Dr Gono said, he had had to undertake non-traditional roles of a central bank as he faced a myriad of challenges such as declining capital flows, droughts, declining capacity utilisation, limited fiscal resources, political polarisation and sanctions which needed a bit of "gymnastics".

Every governor, since 1956 when the central bank was established, had had to face challenges peculiar to their respective era and since 2003, when he took over the reins from Dr Leonard Tsumba, he had had to deal with an abnormal situation that demanded that he employed extraordinary measures to circumvent disaster.

He had had to work with no balance of payments support, loans or other traditional sources of funding which previous governors had enjoyed.

The meeting with parliamentarians was meant to enlighten the legislators on the role played by the central bank over the past five years.

Dr Gono challenged Zimbabweans to rise above "trivialities" of the blame game and work towards rebuilding the economy.

The central bank was committed to ensuring the success of the Short-Term Emergency Recovery Programme launched by Government recently. Implementation would be key to its success.

"Our greatest weakness as a country is that we have done so many studies and launched so many documents but we lack in implementation. As legislators you should make sure that Sterp is implemented because if we don’t implement, we will be back to square one," said Dr Gono.

He reiterated that with distortions having been removed from the economy and the inclusive Government now dealing with most of the issues, the central bank was now in a position to refocus on its core activities of supervising the financial sector, managing the national payment system and playing an economic advisory role to Government, among other functions.