In a statement Monday, Reserve Bank Governor Gideon Gono said he loaned the money from the private hard currency accounts to the government. He says the accounts will be reimbursed when the loans are repaid.
Gono has been harshly criticized for raiding foreign currency accounts, among other questionable practices. In his statement, Gono pleaded with his detractors to ease up.
Now that Zimbabwe has a new coalition government dedicated to reversing its severe economic decline, Gono says it’s time "to let bygones be bygones."
In another development, members of Parliament who received cars from the Reserve Bank of Zimbabwe (RBZ) last week have been asked to return them immediately, Finance Minister Tendai Biti directed on Monday.
Loans totalling US$1,2 billion extended to struggling companies and out-of-budget ministries by the RBZ between 2003 and 2009 are also to be recalled.
The new directive points to a widening rift between Biti and Reserve Bank Governor Gideon Gono – the two uneasy partners at the centre of Zimbabwe’s economic revival efforts.
In a notice published in a state-run newspaper on Monday, Gono said: “The Reserve Bank would like to advise Hon Members of Parliament that the governor is under instruction from the Minister of Finance Hon TL Biti to ask all Hon Members of Parliament to return the second hand vehicles, recently issued to them at their request, by the RBZ.
“While the deadline for the return of the vehicles had been set for Monday, the 20th of April, 2009, it is however the wish of the governor to appeal to the Honorable Minister that this deadline be extended to Friday, April 24, 2009.
“The cars should be parked at the Ministry of Finance parking bays at the New Government complex in Harare and the keys are to be handed over to the Hon Minister of Finance’s office on the 6th floor at the same complex.
“Hon Members are hereby advised that failure to meet this deadline may cause the Hon Minister of Finance to invoke measures that would be designed to ensure total compliance.”
The latest developments signify an escalation of the fight between Biti and Gono. The Finance Minister’s Movement for Democratic Change (MDC) party wants to see Gono removed from the central bank to pacify western donors who blame him for fuelling the country’s economic collapse.
At least 25 MPs from the MDC-T received vehicles from the RBZ, defying the party leader and Prime Minister Morgan Tsvangirai who warned them of disciplinary action.
MPs normally receive vehicles through a parliamentary vehicle loan scheme, but the country is broke and unable to fund the programme. This prompted Gono to offer to loan the MPs second hand cars which were lying idle in the RBZ’s compound. The MPs, Gono said last week, were to return the cars once their vehicle loans were approved by parliament.
It is believed around 50 first time legislators received cars from the RBZ, including MPs from Zanu PF and the MDC faction led by Arthur Mutambara.
Gono also announced that the RBZ had been directed to recall loans totalling US$1,2 billion paid to government ministries and departments since 2003 to “enable the RBZ to also reimburse all corporate and NGO foreign currency accounts dues as well as repay short term facilities, leaving a substantial amount to go towards the bank’s recapitalisation and the return to the core business of lender of last resort.”
The central bank said that if “unconfirmed suggestions” reaching the governor’s office that all equipment distributed under the RBZ’s farm mechanisation programme such as vehicles, computers, buses, fertiliser and fuel are to be returned are true, the bank would comply.
It added: “Equally, institutions and companies that benefitted under the Bacossi programme in cash or in kind, particularly those companies that got foreign exchange support, are hereby being forewarned that a recall of these resources is imminent.”
Private companies listed as among the beneficiaries of a US$13, 7 million loan in 2007 include Lobels, Dairiboard, Unilever and Delta.
The RBZ statement said Gono was being “persecuted” with attempts in progress to investigate alleged financial impropriety at the RBZ “right down to the tea spoon he owns” as well as governor’s family businesses.
“Our call is to let bygones be bygones and for everyone and every entity to start anew and open a new page as repeatedly called for by the principals to the Inclusive agreement,” the statement concluded.