Gono on the offensive – "No case to answer on controversial quasi-fiscal activities"

OPINION – For the first time, Zimbabweans now know that the Reserve Bank of Zimbabwe (RBZ) during Gono’s first term borrowed a cumulative US$5.25 billion from foreign correspondent bank allegedly to meet critical national requirements dispelling Gono’s argument that sanctions prevented the country from accessing international capital markets.

Gono continues to argue that his critics have no moral authority to question the role of the RBZ in his first term and has sought to opportunistically argue that he has been vindicated by the actions of the developed countries in response to the global financial crisis.

He has sought to use the state-controlled media to not only defend himself and the RBZ but to be on the offensive attempting to argue that those who seek to better understand how the peoples’ funds were allocated and assets acquired are really enemies of the President and by default enemies of the state.

To Gono, Zimbabwe was a victim of illegal and evil sanctions and, therefore, the construction of any criticism of the actions of the RBZ must necessarily start from an acknowledgment that the end justified the means and MDC is guilty as charged.

He has yet to explain how the RBZ managed to borrow US$5.25 billion and from whom if sanctions were as effective as he alleges.

In an article published by the state-controlled Sunday Mail of 16 April 26, 2009, entitled: "RBZ clears air over US$1.2 billion debt" http://www.sundaymail.co.zw/inside.aspx?sectid=2429&cat=12, Gono attempts to make the case that the borrowings were all authorized by the Ministry of Finance.

If one accepts that the quasi-fiscal activities were authorized in their conceptualization and implementation, then Gono who evidently feels that he is being unfairly targeted feels that he should be congratulated as a true hero rather than be vilified.

He feels vulnerable and exposed more so because his principal, President Mugabe, has not added his voice to the call for an independent investigation into the affairs of the RBZ and the basis on which the central bank effectively assumed the functions of the government without any constitutional or legal consequences.

It is significant that Gono admits that the RBZ was sanctioned to usurp the powers of cabinet and the oversight role of parliament. He clearly admits that Parliament was not informed of the nefarious and opaque activities of the central bank.

He also makes the case that all the actions were done in the interests of the nation notwithstanding the fact that parliament and relevant organs of the state were kept in the dark.

In his defense, Gono accepts that the parliamentary role in the budgeting process was set aside but makes the case that this was a necessary and justifiable response to the sanctions regime.

In the above-mentioned article, Gono reveals that former Ministers of Finance, Hon. Murerwa and Hon. Mumbengegwi and current Secretary for Finance, Mr. Willard Manungo were the parties that were responsible for authorizing the so-called sanctions busting measures.

He makes the case that he was merely a foot soldier in implementing an agreed program of action to respond to a foreign sponsored opposition party that is now according to him regrettably part of the inclusive government.

With respect to the alleged borrowing of US$1.2 billion, Gono reveals that the debt was incurred following written instructions from Manungo. The nation is now told that the funds were allocated as follows:

#

Beneficiary

Amount (US$)

1.00

Grain Marketing Board

514.20

2.00

Ministry of Information

4.70

3.00

ZESA

15.60

4.00

ZINWA

13.70

5.00

Ministry of Defence

4.40

6.00

Ministry of Finance

228.10

7.00

Zimbabwe Republic Police

1.00

8.00

Ministry of Agriculture

0.07

9.00

Ministry of Health

0.10

10.00

Scholarships

9.40

11.00

Fertiliser and Seeds

243.30

12.00

Ministry of Agriculture

131.10

13.00

Ministry of Foreign Affairs

2.90

Total

1,168.57

Gono seeks to argue that in terms of Section 33(1), Chapter 22:15 and Section 7(1)(n) of the same Act, the central bank is required to obtain prior authority from the Ministry of Finance for any borrowings.

As expected, Gono has records of such approvals from the Ministry of Finance. Gono would then argue that if such records exist, why would Hon. Biti seek to question him and not the parties that authorized the transactions unless the parties that so authorized the transactions were being manipulated by Gono and/or some higher authority.

What is not clear is whether the Minister had any authority to issue the instructions and what role, if any, the cabinet played in the approvals, allocation of funds and implementation monitoring.

Hon. Biti was a member of parliament and it is evident that he like the rest of the Zimbabwean public was not informed of these borrowings.

Gono makes the argument that the funds borrowed were allocated to various government departments as shown above.

Using this argument, the real beneficiary was the government and, therefore, according to Gono it would be mischievous for anyone to seek to interrogate the facilitator rather than the beneficiary.

What Gono fails to mention is that the said funds were not allocated to the beneficiaries as cash but in many of the cases including where procurement was concerned, the normal public procurement guidelines like tenders were set aside and the RBZ was transformed into a supply chain company.

The real mischief is evidently in the implementation and a number of cases that have been brought before the courts have exposed the corrupt nature in which the funds were actually allocated.

Gono has failed to furnish any evidence supporting his contention that authority was granted to use, for example, companies like Flatwater to purchase foreign currency in the black market at the same time he sought to selectively persecute other people.

If everything was done above board and transparently, Gono should ordinarily have no difficulty exposing the RBZ’s contracting parties in executing the so-called mandates from Treasury.

Gono would like Zimbabweans to believe that it is unhelpful for an independent tribunal to be appointed to determine whether the RBZ acted in a manner that is consistent with the democratic constitutional order that was obtaining at the material time particularly considering that the constitution was never suspended to permit the RBZ to assume the functions of cabinet and parliament.

Gono would know that it is unconstitutional for anyone to be a judge unto one’s cause. The relationship between the RBZ and various organs of the state is defined by law and it cannot be acceptable to argue that due to sanctions such a relationship was unilaterally amended to permit one institution to assume the role of another without any legal instrument underpinning such an amendment other than letters from the Secretary of Finance purporting to authorize that which cannot be done in any democratic dispensation.

President Mugabe would be the first one to argue that at no stage in his 29-year reign has his administration acted in contempt of the constitutional order as now alleged by Gono.

If Gono is right, then he is effectively saying that the real person that ought to be impeached should be the President.

Gono’s responses appear to be meant to invite the President and the general public to join the fight.

It appears that the inclusive government’s mandate may already be compromised in that it cannot review the past conduct of state actors like Gono to better understand whether the allegation that sanctions were effective is true and more importantly to bring to book all the actors who may have abused the state for personal gain.

Gono’s friends unlike, for example, Kuruneri, Mushore, Butau, Makamba and others appear to be above the law. Why should Gono and his accomplices’ actions, if as admitted that they violated Zimbabwe’s exchange control laws, also not be subjected to the same scrutiny that others have been subjected to?

Gono makes the argument that to the extent that two reputable external auditors have given the RBZ a clean bill of health, there should be no other audit of the bank. What Gono fails to appreciate is that the funds so allocated belong to the people of Zimbabwe and any debt incurred in their name must be transparently disclosed.

It is common cause that Manungo has no authority to sanction the RBZ to violate the law of the land and more importantly the social contract that underpins the constitutional order.

The state is a peoples’ project and it is not permissible for any state actor to impose obligations including repayment of external loans to the people without their knowledge and consent.

The nation including President Mugabe has a right to know. Gono concedes that there may be merit in an investigation but argues that such an investigation must be conducted by state bodies that may have been beneficiaries of the RBZ donations using state funds.

What is needed is an independent tribunal composed of people who may not have already been compromised by Gono.

Already, Gono is attempting to use the MPs to support his case by arguing that they should be allocated used cars allegedly purchased as part of the sanctions-busting activities.

If the used cars were purchased by the RBZ on behalf of the government then surely the assets would not be on the books of the RBZ. Ordinarily one cannot allocate something that does not belong to him/her. The controversial cars including cars allocated to Ministers belong to the government and one finds difficulty in appreciating Gono’s reasoning.

Hon. Biti rightly ordered that the cars must be surrendered to the rightful owner and if any allocations are to be made to MPs that exercise must be done by the owner and not its controversial agent, RBZ.

Gono makes the case that he declared his assets to the President in terms of the RBZ Act Section 25(1) but what would be more interesting is for the public to be furnished with a copy of the declaration to ascertain whether it reflects what is commonly known in the market as Gono’s real assets.

It would be also interesting to establish the extent of any primitive allocation through rent collection from the proceeds of the quasi-fiscal activities.

Gono would like the public to believe that he is hard working but does not want to be investigated. Prof. Moyo and Dr. Mahoso have come in the open as defenders of Gono’s legacy. It is not surprising that Prof Moyo has joined the used car debate to defend Gono.

In the 26 April 2009 edition of the Sunday Mail, two opinion pieces authored by Prof Moyo and Dr. Mahoso entitled: "Parly cannot spearhead making of constitution" http://www.sundaymail.co.zw/inside.aspx?sectid=2465&cat=8 and "RBZ: Unsung sanctions-busting hero" http://www.sundaymail.co.zw/inside.aspx?sectid=2463&cat=8; respectively go a long way towards creating a conceptual framework and a clumsy defense of Gono’s activities.

Is Gono a hero? This question can only be answered once all the facts are known about the activities of the RBZ. Yes, Gono would like the nation to move forward but unless the nation can come to terms on what really happened it would be difficult to ensure that never again should the state become a football for the few.

The implications former Ministers of Finance must assist the nation in this matter. Murerwa was fired when he sought to question the quasi-fiscal activities undertaken by the central bank. It is, therefore, difficult to understand why Gono would hold the view that Murerwa voluntarily authorized what are clearly illegal and unconstitutional activities.

The nation has a right to know the true nature of the RBZ activities and, therefore, it would be travesty of justice if any white washing were done in the interests of protecting the few.