FINANCE minister Herbert Murerwa on Monday launched a thinly-veiled attack on Reserve Bank governor Gideon Gono when he told parliament he had not been
consulted on the new currency initiative which has become a new political front in the Zanu PF power struggle.
Murerwa, who has crossed paths with Gono before over policy issues, told the parliamentary portfolio committee on Budget and Finance that he was not consulted by the RBZ governor before the introduction of the new bearer cheques.
He said although three zeros had been knocked off the old bearer cheques, there was no guarantee they would not be back on the new bearer cheques by December due to low production and hyperinflation.
Murerwa said besides the currency reforms, a number of things such as increasing productivity were imperative to turn around the economy.
Murerwa’s remarks, coming against a background of fierce clashes over the printing of money earlier this year, betray a strain between the fiscal and monetary policy authorities.
Murerwa has been trying to stop Gono from straying into quasi-fiscal policy matters, although the governor has ploughed ahead, saying he has been given the mandate by President Robert Mugabe to pursue “development strategies”.
During the committee hearing, Murerwa said he did not know what Gono meant when he said during his monetary policy statement last month he was going to announce some things that even his bosses were not aware of.
Asked by committee chairperson and the ruling party’s Guruve North MP, David Butau, what Gono meant by this, Murerwa said he thought this meant that he had not been consulted on the new notes. “I assumed that he was referring to the changing of notes. And that is true because he did not consult me,” Murerwa said.
Murerwa said he was not sure whether the strategy to remove the zeros would work. “The problem we have is of under-production. We have removed three zeros but that is not a guarantee that come December they will not be back,” he said.
This was widely interpreted to mean Murerwa was distancing himself from the new bearer cheques project, especially after Mugabe rejected the minister’s attempt to introduce a $250 000 bearer cheque in June while Gono was away in Russia.
The new family of bearer cheques was hurriedly introduced by Gono to replace old ones within 21 days.
The changeover has caused turmoil among retailers and the public due to a shortage of smaller denominations. Most retailers have also taken advantage of the transition to raise the prices of basic commodities.
When Gono went to Russia on May 31, Murerwa, together with the central bank’s acting RBZ governor at the time, Edward Mashiringwani, approached Mugabe seeking permission to introduce a $250 000 bearer cheque, but they were turned down. Mugabe confirmed on Heroes Day he had turned down suggestions to introduce a $250 000 bearer cheque.
Zanu PF’s Zhombe MP Daniel McKenzie Ncube also asked Murerwa on Monday whether in pursuing quasi-fiscal policies Gono was not acting outside his mandate. “He was acting in good faith, but it’s a thin line,” Murerwa said without elaborating.
Murerwa said government had taken measures to address the RBZ’s dishing out of funds without going through treasury and at the moment that had been reduced.
Asked by MDC MP Abdenico Bhebhe why police had “waylaid people who wanted to deposit their money” by confiscating it, Murerwa said that question could best be answered by Gono but said he supported the need to contain the illegal movement of money.
Murerwa said in carrying out searches for cash police had caused “some inconveniencies that were not intended”.
Chief Bidi Ndiweni of Matabeleland South told Murerwa that although August 21 was the deadline for the phasing out of the old bearer cheques, “there is a hell lot of money which is still out there”.