Isn’t it time to quit, Gono?
THE Reserve Bank has finally intervened to ease the cash crisis across all sectors of the economy. But governor Gideon Gono should not expect plaudits for his messianic efforts after what should have been th
e traditional festive season passed as a long nightmare for most Zimbabweans who couldn’t access cash from banks.
The trouble with government’s retributive acts against a few errant individuals is they always end up hurting the innocent. The withholding of cash from banks to punish what Gono called “cash barons” had the same effect as the decision to slash the prices of basic commodities by half in June: it is ordinary Zimbabweans who bear the brunt of these ill-conceived acts.
Many businesses have not fully recovered from the losses induced by the price cuts. As a result, the poor who were intended as the major beneficiaries of the price reductions now spend even more time searching for basic foodstuffs. Many spent the Christmas period in long queues outside banking halls, hoping that by some miracle they might get some money. It was all in vain.
But Gono had more shockers up his sleeve. Up to now he has not named any of the cash barons who were hoarding the $200 000 bearer cheques.
Then after forcing hundreds of people in rural areas to risk drowning travelling to the centres where they could convert their cash before his December 31 deadline, he announced the $200 000 was still legal tender. There can be no better demonstration of policy failure than this.
What should be made clear is that Gono cannot resolve the country’s crisis through piecemeal acts of retribution. There are many innocent Zimbabweans who would only be too happy to keep their money in the formal banking system if only they could access it on demand. But that has become more the exception than the rule of business in Zimbabwe.
Still, with inflation at close to 8 000% who would want to keep their money in a bank account? The rampant scarcity of commodities, itself a result of price control freaks in government, is also forcing every Zimbabwean to move around with large quantities of cash, just in case they chance upon something to buy.
At the end of the day it must be recorded that whatever temporary relief Zimbabweans get from the extension of the life of the $200 000 notes, Gono himself has permanently lost all credibility as head of the central bank. He should be well-versed with the law of unintended consequences which he uses to berate others.
The effect of his duplicity over the demonetisation of the $200 000 means that very few people will trust any of his future policy pronouncements just as few still believe that he has any credible list of cash barons. He has created widespread uncertainty about the RBZ’s operations by telling the world that it has no policy framework — it operates entirely on the whims of its governor.
It is one thing to adopt desperate measures to deal with a desperate situation. It is another to hold the whole nation to ransom because a few politically-connected individuals don’t want to play according to Gono’s ill-defined rules.
The biggest casualties of Gono’s desperate measures were ordinary folk who were forced to dispose of their legitimate cash holdings, for instance to purchase uniforms and pay school fees, buying trinkets they don’t need.
Yet there is no sign that we are getting to the end of this dark tunnel of troubles. Reports last week that one of Gono’s own advisors had been implicated in a $10 billion scam in the latest denominations don’t inspire confidence in what the RBZ is trying to do.
Whether the gentleman concerned is guilty or not guilty is not the real issue. The issue is that one individual had access to that kind of money while the rest were starved and spent long hours standing in queues.
This issue alone points to a central bank that is keen to persecute individuals and financial institutions for laxity in enforcing regulations but is itself guilty of the same crime. It means those who have access or have close links to the RBZ can get as much cash as they want for whatever purpose, while the rest of the nation is restricted to miserly withdrawal limits of $50 million a day.
Yet the big question still remains unanswered after all is said and done. After Gono failed to name and shame, and instead extended the lifespan of the $200 000 bearer cheque, what stops the same robber barons from stashing away more money, even at the risk of being ambushed under Sunrise III?
What assurance is there for ordinary Zimbabweans that the worst of the last quarter of 2007 is over? Isn’t it time to quit, Dr Gono?