The knives are out for Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono, with Energy Minister Mike Nyambuya the latest among a growing list of senior government officials to criticise the reformist RBZ chief and call for his wide-ranging powers to be clipped.
Nyambuya — clearly peeved at Gono after the governor blocked his proposals for huge increases in power tariffs — attacked Gono during a meeting of President Robert Mugabe and his Cabinet two weeks ago, accusing the RBZ chief of breaking ”legal statutes” to usurp the powers of the Zimbabwe Electricity Regulatory Commission (ZERC).
The ZERC, which falls under Nyambuya and regulates energy tariffs, had last month successfully appealed to the government to be allowed to hike tariffs by 770%, spread over a nine-month period.
The Cabinet, however, virtually rescinded the decision, allowing relatively lower tariff increases after Gono told Mugabe’s executive committee that the huge tariff hikes proposed by Nyambuya and the ZERC would fuel inflation and derail attempts to revive Zimbabwe’s collapsed economy.
But Nyambuya, in a document submitted to Cabinet on March 7 2006, heavily criticised Gono, accusing him of overstepping his mandate and saying Gono was stalling the development of the energy sector in his bid to keep inflation figures down.
Nyambuya’s document, a copy of which was shown to independent news service ZimOnline, reads in part: ”The above points to clear interference by the RBZ in its quest to meet its own inflation targets at the expense of the electricity supply industry requirements to sustain operations.
”With the appointment of the Zimbabwe Electricity Regulatory Commission June 2005 there is need for role clarity given the continued usurping of ZERC powers by the RBZ even in the existence of legal statutes.”
The energy minister charged that apart from interfering with the tariff regulation, Gono was also stalling plans to expand Zimbabwe’s electricity-generation capacity by delaying releasing financing for a joint Zimbabwe/Iran project to expand the Kariba Hydro power station.
”The Kariba expansion project has already been forestalled even after the signing of the memorandum of understanding between RBZ and EDBI of Iran on 19 January 2005.
”The following issues are still outstanding from the RBZ; financing terms, 15% down payment or US$30-million, loan financing agreement and financing of 40% civil works,” Nyambuya’s document states.
Both Nyambuya and Gono were not available for comment on the matter. But the disclosure of Nyambuya’s strong criticism of Gono comes amid reports in the local press last week that the RBZ governor — tasked by Mugabe to fix the limping economy — had also clashed with Finance Minister Herbert Murerwa over the economic direction of the country.
Murerwa, who has overall responsibility over economic policy, is said to have accused Gono of acting without consulting him and of overstepping his role as monetary policy chief to undertake quasi-fiscal activities.
Several other senior government officials are also said to have criticised Gono, accusing him of behaving like a ”prime minister”.
The press reports, however, quote Gono denying Murerwa’s charges and insisting that he has always acted after consulting the Presidency, Cabinet, relevant parliamentary committees and other key stakeholders.
An affable character, Gono — seen as among the few doves in a hard-liner government — was appointed RBZ governor in 2003 with the task to chart Zimbabwe’s economic revival path.
He has been praised for bringing discipline back to Zimbabwe’s banking sector and has won plaudits for saving the country from expulsion by the International Monetary Fund by paying off outstanding debts.
But Gono’s inflation-fighting measures have been a huge flop, with the key rate now above 700% and still rising. — ZimOnline