Gono appointed central bank governor

The managing director of the Jewel Bank Gideon Gono has been appointed governor of the Reserve Bank of Zimbabwe which has been without a leader since April 2003 when Leonard Tsumba was eased out, three months before the end of his term.

Though a close confidante of President Robert Mugabe, United States embassy officials said Gono is likely not to have any impact because the central bank chief is powerless.

“Gono would no doubt be happier continuing to make money as the GOZ's unofficial banker. He controls Mugabe's accounts and maintains a close, multifaceted relationship with the President,” the embassy said in a cable dispatched on 4 November 2003.

“Gono adds little as Reserve Bank governor. He is a self-made man who understands how markets function, but his own fortunes have been tied to sweetheart deals with the GOZ.

“He will not serve as a check on GOZ overspending and over-borrowing. In fact, his ownership of a commercial bank and the major business newsweekly signals a major conflict-of-interest.”

 

Full cable:

 

Viewing cable 03HARARE2189, GONO TO RUN CENTRAL BANK CHIEFarer

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Reference ID

Created

Released

Classification

Origin

03HARARE2189

2003-11-04 14:36

2011-08-30 01:44

UNCLASSIFIED//FOR OFFICIAL USE ONLY

Embassy Harare

This record is a partial extract of the original cable. The full text of the original cable is not available.

 

041436Z Nov 03

UNCLAS HARARE 002189

 

SIPDIS

 

SENSITIVE

 

STATE FOR AF/S

NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

USDOC FOR 2037 DIEMOND

TREASURY FOR OREN WYCHE-SHAW

PASS USTR FLORIZELLE LISER

STATE PASS USAID FOR MARJORIE COPSON

 

E. O. 12958: N/A

TAGS: ECON EINV PGOV ZI

SUBJECT: GONO TO RUN CENTRAL BANK CHIEFarer

21842184

 

Ref: Harare 2184

 

1. (U) Summary: President Mugabe has decided on Jewel

Bank Managing Director Gideon Gono as the new Reserve

Bank governor. Gono's close ties to Mugabe make it

unlikely he will be an assertive, independent central

banker. End Summary.

 

2. (SBU) Since the GOZ eased Leonard Tsumba from the

governorship in April - three months before his term's

end - the Reserve Bank (RBZ) has been leaderless. This

has complicated the Bank's operations at a time of

profound monetary and fiscal crises. We had learned from

several sources over the past months that Gono was the

frontrunner. Apparently, however, he had been trying to

find a diplomatic way maneuvering out of the appointment.

 

Comment

-------

3. (SBU) Although the GOZ has made no official

announcement, our latest reports indicate that Gono

failed to lobby his way out of the job. Gono will be

Mugabe's vehicle to shake up the RBZ, announced last

Friday (ref). Given the powerlessness of the RBZ

governor and the sad state of the economy, this is a

posting that few covet. Gono would no doubt be happier

continuing to make money as the GOZ's unofficial banker.

He controls Mugabe's accounts and maintains a close,

multifaceted relationship with the President.

 

4. (SBU) Gono adds little as Reserve Bank governor. He

is a self-made man who understands how markets function,

but his own fortunes have been tied to sweetheart deals

with the GOZ. He will not serve as a check on GOZ

overspending and overborrowing. In fact, his ownership

of a commercial bank and the major business newsweekly

signals a major conflict-of-interest.

 

Sullivan

 

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