26 Feb 2009

The first round of a tough Zimbabwe fight

Tendai BitiTendai Biti, Zimbabwe’s new finance minister, has got to have about the toughest job in the world.

His mission: end the meltdown and deliver on promises made by Prime Minister Morgan Tsvangirai to pay civil servants and kick-start Zimbabwe’s moribund economy.

The trouble is, he’s got no money and rich countries aren’t prepared to bankroll Zim’s phoenix-like resurrection as long as Robert Mugabe remains president. That’s because there’s no guarantee any new money won’t end up in the pockets of the president’s cronies.

Mr Biti remains hobbled by the fact that it’s Mugabe’s man who still holds the purse-strings: Gideon Gono, Governor of the Reserve Bank of Zimbabwe. He’s a powerful man with a monstrous ego, who almost singlehandedly oversaw the destruction of the economy, printed the Zim dollar into extinction and knows where all the bodies are buried – at least metaphorically.

Gideon Gono

Gideon Gono

He’s trusted by Mugabe and distrusted by just about everyone else. Biti’s branded Gono “an economic saboteur” and getting Gono to go – and go now – is considered the single most important factor in the struggle to get Zimbabwe back on its feet.

Tonight Mugabe will make a speech to mark his 85th birthday and it will be broadcast to the nation. One thing he will say is that he personally appointed Gono to a new five-year term at the Bank and that that is where Gono will stay. But as we’ve come to learn with Zimbabwe: nothing’s not negotiable.

“So what price will Robert Mugabe extract from the MDC for his departure?” asks a senior western diplomat in Harare. “Gono has his hands in many pots and knows about revenue streams that no one else does,” the diplomat adds.

“But [his departure] would be deemed a political defeat for Mugabe and he can’t let that happen.” His inability to protect his own private banker would expose Mugabe’s vulnerability.

Until Gono does go, it will be impossible for international finance institutions “to dock with the Ministry of Finance” – as the diplomatic source puts it. His departure would allow the International Monetary Fund into the Reserve Bank; an audit could be started to determine what money does exist and where it is. All this would hugely enhance Tsvangirai’s credibility as PM.

Tendai Biti

Tendai Biti

The charismatic Mr Biti clearly believes in making his own luck. Word from a summit of Southern African finance ministers in Cape Town today (where they’ve been meeting to discuss Zimbabwe’s reconstruction) is that South Africa is poised to inject US$2bn into his empty coffers, as bridging finance.

Mr Biti had been after $1bn to help him pay civil servants’ salaries in foreign currency – as promised by Prime Minister Morgan Tsvangirai in his inauguration speech.

But Mr Biti, it’s reported, had come to Cape Town with a request for a further US$1bn which would target the cholera crisis (which has now killed nearly 4,000 Zimbabweans) as well as other health, education, sanitation and energy services.

The diplomat I spoke to in Harare reckons that South Africa, having shoe-horned Tsvangirai into the power-sharing deal, has a moral responsibility – as guarantor and architect of that deal – to provide a financial shot in the arm. It’ll be interesting to see whether South Africa can also bring its influence to bear on Mugabe to get rid of Gono.

“There’s still a fight going on,” the diplomat says, “and this is the first round. This is going to be tough… It’s still very early days, but Morgan Tsvangirai has found it even harder than he imagined.”

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