There are rumours that treasury boss Dr Herbert Murerwa and central bank chief Dr Gideon Gono are at one each other’s throats. They reportedly regularly have SMS wars, with a defiant Gono reminding his boss that they are ”working for the same government, and that he [Murerwa] should be patriotic and listen to him,” treasury insiders say.
During his budget presentation, Murerwa told President Robert Mugabe and Parliament that Gono would present his monetary policy statement this week. Two days later, Gono announced that he wouldn’t deliver the monetary policy statement until next January.
”It is critical that the monetary policy statement be reconciled not only with the budget, but with sentiments, advice and opinions from our interaction with the IMF [International Monetary Fund] … as well as views emanating from the forthcoming people’s conference of the ruling Zanu-PF party,” Gono said.
”Ignoring these two important stakeholders while there is still a window of opportunity … will be a fundamental omission on our part as the Central Bank,” Gono retorted in a state-owned weekly newspaper.
Murerwa was reportedly angry about Gono’s statement. ”Murerwa is being portrayed as insensitive and Gono is sending a message in a subtle way that he’s the sensitive one,” treasury officials told the Mail & Guardian.
While Murerwa and Gono might have issues with each another, a six-member IMF team visiting the country this week has issues with both of them.
The IMF will find that none of the recommendations it made three months ago have been addressed. In its last visit in September, the global money lender told Mugabe’s government to stop printing money in order to reign in inflation, remove the fixed exchange rate, privatise its ailing parastatals that have been bleeding the fiscus and cut the budget deficit.
”Nothing has changed,” says John Robertson, an economic consultant. ”None of the parastatals have been privatised. The government seems to want to retain total control over them. There are no takers for any equity in our presently loss-making organisations,” he said. Robertson added that the much-touted Chinese investments in electricity and railways also haven’t materialised.
”It’s a huge embarrassment,” says Dr Daniel Ndlela, an economic consultant. ”The exchange rate is still fixed, thumbing its nose at the IMF to whom they are going cap-in-hand for the balance-of-payments support. We don’t want Gono’s speech [on monetary policy], he should just devalue the Zim dollar and keep quiet,” Ndlela said.
The official exchange rate is still fixed at Zimbabwe $250 against the greenback. ”It’s the widest gap ever between the official rate and the parallel rate, where the greenback is now fetching $2500 to the Zim dollar,” says Ndlela.
The IMF will be ”disappointed with both Gono and Murerwa”, a banker noted.
Mugabe has recently tried to address the contentious property rights issue by granting over 100 new farmers with 99-year leases on seized commercial farmlands. ”The government think they made a major step by issuing out 99-year leases on the farms, but the institutions I spoke to say there is no possibility [of the forms] being acceptable as collateral for bank loans because there is no tradability for assets prescribed by 99-year leases,” says Robertson.
”The current situation will get worse. Scarcity of foreign currency will probably get worse, we are going to import more food than we did this year and we have no prospect for investment inflows,” he said.
Zimbabwe still owes the IMF US$125-million. Zimbabwe’s voting rights and balance-of-payments support were suspended by the IMF seven years ago. What the IMF team can see as it strolls through Harare’s streets is doom and gloom. ”The prices are shooting through the roof,” says Ndlela. ”It’s gloomy. There are shortages already. You can’t get sugar in shops either and visiting the countryside for holidays is an impossibility,” Ndlela said.
The only reminders of the upcoming holiday season are the traditional lustrous Christmas lights around Harare’s Africa Unity Square, which were lit by an unelected government-imposed mayor last week.
In supermarkets, prices have increased dramatically. The prices of 300ml soft drinks went up by 50% while commuter omnibus fares increased by 40%.
”Prices are going up every day, it’s very difficult for us to cope,” said a middle-aged shopper at Newlands TM supermarket. ”Looking at the way the prices are going up, we will only be able to buy the basics; drinks are a luxury this festive season,” says 44-year-old Paul.