Presentation to Parliament

Presentation to Parliament
A Presentation to Members of Parliament by Dr. G. Gono
Sat, 04 Apr 2009 02:37:00 +0000

THE following is a speech delivered to the House of Assembly and Senate by Reserve Bank of Zimbabwe Governor, Dr Gideon Gono on Thursday 2 April 2009. In the speech the governor gives an account of the conduct of monetary policy in Zimbabwe during the height of its extra-ordinary challenges.

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1. Mr Speaker Sir, Madam President and Honourable Members of the House of Assembly and the Senate respectively, it is an honour and a privilege for me to have this rare and much appreciated opportunity to first share with you and then hear from you issues about the conduct of monetary policy in our
country when it faced unprecedented extraordinary challenges between 1December 2003 and 31 March 2009.

2. Because the focus of my presentation is about the role of the Reserve Bank of Zimbabwe in the conduct of monetary policy, and because we all know that a lot of presumptions and assumptions have been made and claimed about what that role has been, I believe it is useful for me to first make clear quite categorically what the role of the Bank HAS NOT BEEN before I lay bare what it actually has been and why.

3. I have been very amused to read in the media claims that the Reserve Bank of Zimbabwe operated like a Parallel Government between 1December 2003 and 31 March 2009.

4. For some reason, and this alone shows that those who have peddled the claim do not believe its veracity, nobody—not a single person—has ever made the claim to my face or in my presence. The claim is apparently a dark room dogma, much rather like an urban legend whose truth is assumed but never proved.

5. Keeping in mind that parallel lines never ever 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 competition with the State and Government headed by His Excellency President Robert Mugabe.

6. The record 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 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.

7. There is a world of difference between being a Point Institution and a Parallel Government.

8. As I will show in some detail, as the head of a strategic Point Institution, I took my instructions from my principals and those instructions were made and implemented in terms of the relevant laws and Constitution of Zimbabwe.

9. It should be understood, however, that the implementation of the instructions required the Reserve Bank to be structured and so equipped as to be able to meet the extraordinary challenges that were at play. Perhaps the fact that the Bank was able to structure itself and to equip itself sufficiently enough to pursue a strategy that made a difference explains why some people then mischievously saw the Bank as a Parallel Government when what they were in fact seeing was an implementation strategy of the Government of the Republic of Zimbabwe.

10. It may very well be also the case that some busybodies were overwhelmed by the audacious decisions and measures taken by the Reserve Bank which they then mistook for a Parallel Government.

11. Yet the simple fact is that fighting extraordinary challenges invariably means taking audacious decisions and measures. Just a few days ago, President Barack Obama effectively fired the Chief Executive Officer of General Motors (GM). That action was unprecedented and it has raised eyebrows not only in the American automobile industry but also across Wall and Main Streets. But that is exactly what happens when a country is facing business unusual: unusual but important corrective things happen as is amply borne out by the Zimbabwean case between 1 December 2003 and 31 March 2009.