US ambassador to Zimbabwe, Christopher Dell, took a swipe at Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono this week saying he should have no role in the formulation of sectoral policie
Speaking at Africa University on Wednesday, Dell said that Gono was the only central bank governor in the world who involved himself in sectoral policy formulation.
“Where else in the world does a central bank governor formulate sectoral policy?” Dell asked.
He said Gono had misjudged the influence of diplomats when he asked them to portray a better image of Zimbabwe considering investors carried out their own research when it came to looking for investment destinations.
“At his presentation to the diplomatic community he (Gono) called on the assembled ambassadors to do Zimbabwe a favour and portray a positive picture of Zimbabwe to investors,” Dell said. “I believe Gono has misjudged diplomats’ influence on investors. There are not many governments left in the world that can persuade or direct their business community to invest in a particular country,” said Dell.
He said the continued printing of money by the RBZ was impacting negatively on the economy as it affected the country’s currency value and the cost of food.
“The Reserve Bank keeps the printing press running and the economy suffers through the ripple effects on the value of the currency and on food and fuel supplies,” said Dell.
He said the involvement of government in every facet of the economy continued to have a negative impact.
Dell raised concern over the current level of government control of the economy. “Why do the officials fear unleashing market forces? Do they have so much to lose personally if they were forced to compete on a level playing field with others?” asked Dell.
“Since I arrived in this country I have been struck repeatedly by the extent of the government’s involvement in so many far-reaching aspects of the economy. Its urge to control, control, and control some more puts a stranglehold on the economic activity that belongs solidly in the private sector,” said Dell.
The US ambassador said collected revenues by government through taxes were failing to meet public spending.
“Fiscal probity is non-existent when the budget deficit hovers in the double-digits. Even at Zimbabwe’s high rate of tax collection, revenue in a contracting economy cannot keep abreast of the country’s public spending.”
Like previous International Monetary Fund reports, Dell noted the government’s bloated wage bill as one of the major causes of the problems.
“The government’s wage bill, saddled as it is with ghost workers benefiting from the patronage system, is an astounding 20% of GDP. I ask you, are you receiving a level of service commensurate with this outlay?”
The US envoy said the current economic situation was not a result of drought or sanctions, as claimed in official circles, but a result of government policies.
“Neither drought nor sanctions are at the root of Zimbabwe’s decline. The Zimbabwe government’s own gross mismanagement of the economy and its corrupt rule has brought on the crisis,” Dell said. He said inconsistent and misguided government policies were impacting on direct foreign investment.
Misguided government policies and not sanctions had discouraged foreign direct investment, Dell said. He quoted statistics by the Centre for Global Development which said the quality of life in Zimbabwe had fallen to the levels of 1953 when the Federation of Rhodesia and Nyasaland was formed.
“That’s an astonishing reversal of 52 years of progress in only a dozen years,” Dell said.