Zimbabwe’s Minister of Finance, Herbert Murerwa, on Monday launched a thinly veiled attack on Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono when he told Parliament he had not been consulted on the latest currency initiative that 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 have been knocked off the old bearer cheques, there is no guarantee they will 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 are 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 of which even his bosses were not aware.
Asked by the committee chairperson, 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 is not sure whether the strategy to remove the zeros will 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 has widely been interpreted to mean Murerwa is distancing himself from the new bearer cheques project, especially after Mugabe rejected the minister’s attempt to introduce a Z$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 Z$250 000 bearer cheque, but they were turned down. Mugabe confirmed on Heroes’ Day he had turned down suggestions to introduce a Z$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 the government has taken measures to address the RBZ’s dishing out of funds without going through the Treasury, and at the moment that has been reduced.
Asked by opposition Movement for Democratic Change MP Abdenico Bhebhe why police have “waylaid people who wanted to deposit their money” by confiscating it, Murerwa said that question can best be answered by Gono but added he supports the need to contain the illegal movement of money.
Murerwa said in carrying out searches for cash police have 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”. — Zimbabwe Independent