Reserve Bank of Zimbabwe – Villain or Messiah? – By Mutumwa Mawere
OPINION – The Governor Dr. Gideon Gono, on Thursday, 2 April 2009, responded not only to the Deputy Prime Minister, Professor Mutambara’s maiden speech to Parliament delivered a week earlier but all his critics, by delivering to the House of Assembly and Senate his own account of the conduct of monetary policy during his first term, a period he describes as a time of extraordinary challenges.\r\n
Even Dr. Gono must be acutely aware that for Zimbabwe to count as a democracy during the period that he describes in a self serving manner as characterized by extraordinary challenges, it needed to meet certain standards of electoral accountability, provide some level of constitutionally protected liberty to citizens, and ensure that national security embraces the security of Zimbabwe and all its people not just ZANU-PF and its leadership.
Not only is it rare for a person accused of systematically undermining the democratic constitutional order to be allowed to give his own account to the very people who are compelled under the same constitutional order to know how the allocation of the resources of the people is approved and applied; but the fact that the legislature in an inclusive government framework allowed the presentation by Gono and not Hon. Biti to take place.
Ordinarily, it should be the Minister of Finance’s role to explain to the people of Zimbabwe through their representatives whether in fact the actions of Gono were in line with the democratic constitutional order after completing an independent audit of all the transactions that were undertaken by the RBZ in the name of the people of Zimbabwe.
What the presentation of Gono confirms is that he is still in charge and through patronage that Hon. Biti has attempted to stop, he still controls the vulnerable members of parliament, particularly, the new recruits who were not part of the gravy train.
Only a few can stand up to Gono but it is evident that parliamentarians may not have the financial means to discharge the mandate that is expected of them to bring the kind of change that the country requires.
If Dr. Gono has nothing to hide, then surely the people’s representatives must be given an opportunity to critically examine the nefarious activities of the RBZ. Hon. Biti can and should be the person to exonerate Gono rather than allowing Gono to be the judge unto his own cause.
At no stage during President Mugabe’s 29-year tenure as head of government was the constitution suspended to allow for the RBZ to perform functions that should rightly be performed by cabinet and the legislature.
In fact, it is not evident how under a democratic constitutional order, the central bank can be converted into a the kind of institution that it had developed into with former Police Commissioners being employed by the bank to undertake criminal investigations all in the name of protecting the motherland.
Ultimately, any democratic constitutional order is rendered secure through adherence to constitutional principles and protection of the bill of rights.
Dr. Gono must know that in a republic even a President is not above the law and is and must be accountable to the people.
The RBZ does not have at its disposal resources that are independent of the resources provided and paid for by citizens.
It is instructive in Dr. Gono’s presentation that he believes that the state can have a life of its own and instructions on resource allocation can be legitimately made by the head of state with no checks and balances in place.
During Dr. Gono’s first term, the legislature was bi-partisan and it cannot be acceptable that the legislature was not privy to how state resources were allocated.
Accepting the argument that the sanctions regime did not permit for state institutions to account to parliament before resources were allocated is to sanction authoritarianism.
It must be accepted that Zimbabwe was rendered insecure by abandoning the rule of law and covering up illegality and abuse of state institutions and power.
There can be no better candidate to expose the undermining of the democratic constitutional order than Gono whose account and justification for introducing opaque quasi-fiscal operations confirms abuse of state power and corruption.
As predicable, Dr Gideon Gono, dismissed allegations that he has been running a parallel Government, stressing that everything he did was legitimate and within the confines of the Reserve Bank Act.
Dr Gono made the point that it was unfortunate that those bent on criticizing him had not researched on the functions of the central bank as laid out in the Act as it to suggest that in framing the post-colonial social contract, the RBZ could effectively substitute the cabinet, legislature and the judiciary.
He lamented that about 75% of the RBZ advice to the executive was not implemented and had the RBZ recommendations been implemented Zimbabwe would not be where it is today. In making this statement, Dr. Gono was effectively putting the blame on President Mugabe as the ultimate gatekeeper.
The buck has always stopped at President Mugabe for 29 years and Gono by saying to parliament that: "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 made he contradicts the point that he has always made that sanctions were solely responsible for the economic meltdown.
The opportunistic argument being made is that if Gono were the head of government, Zimbabwe would have been a successful country notwithstanding the obvious implications of his actions to the democratic constitutional order.
To justify his assertion that he should be treated as a Messiah, he took parliamentarians through some sections of the RBZ Act, particularly Section 6 (g), which states that 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.
He also made the point that he was 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".
By state, he means President Mugabe and not the citizens of Zimbabwe who elected their representatives to the legislature to be their custodians and oversee the actions of the executive branch of the government.
I do not believe that in framing the RBZ Act, there was any intention to allow the President to assume authoritarian powers. The true interpretation of the RBZ Act is that the RBZ is merely an organ of state for certain functions.
However, resources of the country should and must be allocated through a budgetary process that has to be approved by the legislature before being deployed to the individual ministries and institutions.
It may not be self evident to Dr. Gono that at all material times, the cabinet of Zimbabwe was functional and one would have expected the resources secured through the RBZ to still pass through a budgetary process so that the legislature’s oversight function could not be compromised or undermined.
What Dr. Gono confirmed to parliament is that the nation may never know how its resources were allocated during the so-called "dark years".
Any resources that have been spent in the name of government must be disclosed so that the people can get a better insight into how the RBZ executed its mandate.
He made the point that 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.
To the extent that the instructions involved the use of resources belonging to the people of Zimbabwe, it must be evident to even Dr. Gono that his principals did not have powers to make such instructions. What is remarkable is that Dr. Gono failed to disclose the names of the so-called principals and how such instructions were issued.
The country may never know how the RBZ then implemented such instructions and whether in fact corporate governance standards were adhered to. It has now been established that shadowy companies were used as instruments by the RBZ of executing such questionable instructions.
What is important for the inclusive government is for the details of the activities to be exposed so that an objective assessment of Gono’s conduct is undertaken.
During the so-called "dark days", the RBZ was at the forefront in targeting selected businesspersons on allegations of externalization and economic sabotage.
However, it is instructive that transactions involving foreign exchange that the RBZ with its approved contracting partners would never be subjected to the same interrogations as forex transactions undertaken by Gono’s enemies who invariably became automatically also enemies of the state.
It was Gono after all that saw no impediment for the RBZ to engage in buying foreign exchange at parallel exchange rates and yet he now wants to convince the world that he was not operating a parallel state that was only accountable to his principals.
The link between the opaque quasi-fiscal operations, money-printing and other interventions and hyperinflation and worsening economic situation is a direct and causal one.
Accordingly, criticism centered on Gono’s misguided interventions such as the Agricultural Sector Productivity Enhancement Facility, Basic Commodities Supply Side Intervention (Bacossi) and Farm Mechanization Programme are not only legitimate but if not addressed comprehensively by the inclusive government may permanently impair the ability of the new regime to restore the confidence of the people.
Dr Gono confirmed the widely held view that taking advantage of the failed state, the RBZ effectively substituted the role of the cabinet by saying: "….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".
He then made a significant statement to parliament that: "All that we did, however, was authorized, transparently reported upon at different platforms and appreciated by all beneficiaries, including by those who today hold different views in public."
It is important now more than ever for people of Zimbabwe to stand shoulder to shoulder with the inclusive government to appoint a Commission of Inquiry to answer the questions of authority, transparency, and identity of beneficiaries in respect of the role of the RBZ during Gono’s first term.
In a any democratic constitutional order, no one in government has the power to appoint the RBZ as a so-called super "point institution" to lead the fight against socio-economic challenges the country faced.
He admitted that the RBZ operated under a strategic umbrella of "necessary ambiguity with constructive intent".
It is important for a Commission of Inquiry to determine what necessary ambiguity means and who has the necessary constitutional right to define any ambiguity as necessary and constructive in terms of its intent.
Dr Gono has provided enough background material for the possible impeachment of President Mugabe if it is confirmed that he authorized the RBZ to perform functions that are constitutionally untenable. What is more important is to establish whether in fact the RBZ in performing such extralegal functions, crimes were committed that President Mugabe may not even be aware of.
By admitting that: "Zimbabwe was going through an economic war and "when you are at war, you cannot ask for transparency in some instances".
This statement alone exposes the contempt that Gono holds for a democratic constitutional order.
He also made the point that he started working in the trenches from 1988 without explaining how a democratic regime that has accused many of attempting to undermine the state through illegal activities could even be remotely associated with such conduct.
As Governor, Dr Gono boasted to parliamentarians that 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 utilization, limited fiscal resources, political polarization and sanctions which needed a bit of "gymnastics.
He confirmed to parliamentarians that some of the missions he took on behalf of the state included sourcing fuel, maize, wheat, lines of credit and other critical national requirements.
What is remarkable is that at this late hour, Dr Gono is oblivious of the implications of his admissions on President Mugabe’s integrity and fitness for office.
No President of a democratic country can ever place the future of so many in the hands of one man.
Gono is human after all and has his own friends and family who naturally had access to him. To what extent were his friends and cronies the real beneficiaries from the kind of power that was vested in an unelected and unaccountable person?
Just to demonstrate the synchronization and alignment between President Mugabe and Dr Gono, it significant that Dr. Gono said on Thursday, 2 April, that: "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," and on Friday, 3 April, President Mugabe had this to say: "We dare not indulge in the luxury of engaging in unending theoretical discourse, for our thematic slogan should be resonantly ‘Implementation! Implementation! And Implementation Again!’".
However, the previous implementation of Gono through various failed operations and initiatives should lead any rational mind to rethink about implementation without a plan and more importantly without the knowledge and consent of the governed.
In defending himself, Gono no doubt has adopted Obama as his mentor and it was, therefore, not unexpected that he would seek to link his actions to the response of the Obama administration to the current financial meltdown by saying: "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."
What Gono may forget is that President Obama was elected through a transparent process while he is not elected. Gono has challenged the nation to critically examine his record and it is important that a jury be set up to answer the question of whether the allegations that he is nothing but a criminal are valid or not. It is time that an independent tribunal makes a determination on the role of the RBZ under Gono.