'We are tried, tested people'

Continued from Saturday

It may not be a defeat, but you took the enemy’s currency as your own, and you are still using it as your national currency ?

A: We never said Americans are an enemy to us.

We never said the British or any other nation for that matter is our enemy. No.

We never said the American dollar was our enemy.

We are pragmatic enough to know that what we cannot immediately change, we accept it as a fact and take our time to figure out how to.

Q: But in so doing, you lost control of your monetary policy. If the value of the US dollar jails steeply, you have no counter-measures to protect yourselves because you don’t control the US dollar?

A: The world we live in is one of gains and losses.

A man who believes that his mission is just to go, go, go, go, and not pause is a man who is delusional, and President Mugabe is not delusional, I am not either, and the majority of Zimbabweans are not.

We are tried and tested people. And believe there are times when you have to sleep with the enemy; if for nothing else, it is for reconnaissance purposes.

Q: And you used the US dollar as national currency without even having permission from them?

A: Precisely.

Q: How did they like that? Did they call you and say: “Why are you using our currency?’’

A: No, in all our documentation, we never say we have formally dollarised.

We never say that. We have never said we have rand-ised our economy (using the South African rand).

We would have had my former counterpart in South Africa calling us to order.

We realised the pitfalls of formalisation, and decided to call it multi-currency.

Multi-currency is a generic term, it is not a proprietary term such as the US dollar or dollarising. Nobody owns the term multi-currency.

We simply said: “Let anybody who has got a currency that is demanded by our people come forward, and our people shall exercise their right to freedom, choice, to take whatever currency they so wish. And may the currency they love most dominate our economy.”

As you know, official dollarisation requires an agreement with the owners of that currency.

That is why we still have problems with small change, we can’t go to the Federal Reserve and say, “Can you please print us one-dollar notes and so forth?” They would say,

“Where are you coming from?” And we are not about to embarrass ourselves.

Q: Towards your retirement, you became a fervent advocate of the non-return of the Zim dollar, why?

A: No, no, no. I was wrongly quoted. In fact, if the people of this country had followed my advice and that of president Mugabe, when we introduced the multi-currency regime, we would not be experiencing the liquidity challenges that we are facing today.

Furthermore, for your information — and this is backed by documentation, dates, and facts — multi-currency was not introduced during the Government of National Unity as is often said. Not even just before it.

Multi-currency was something that we studied as a central bank project between May and August 2008.

We even licensed petrol stations, certain supermarkets, and wholesalers to participate in the exercise.

We held a launch of this approach at the Harare International Conference Centre in August 2008 and pronounced that we were going to carry out this experiment under a licensed framework until November 2008, when we laid the groundwork for multi-currency in this economy.

Q: And you say you were misquoted about not wanting the return of the Zim dollar?

A: Once the authorities have decided on a way forward, a cadre’s duty is to support that way forward and not necessarily be discordant. I never said the Zim dollar was not going to come back.

But as governor of the central bank, I did set conditions that would allow the Zim dollar to come back, and such conditions include at least 6 months’ worth of foreign reserves, a sustained track record of economic growth, with factories operating at not less than 80 percent of capacity utilisation, with a debt-GDP ratio that is below the 50 percent mark, with exports significantly outpacing our imports.

Q: But that is a tall order!

A:  A tall order, yes. But when you look at the different kinds of fruits, some are produced by some of the tallest trees, but people never stop going after them just because it is a tall order.

No. It is the determination of the people to get there that matters.
The taller the challenge, the greater and more exciting it is to achieve it.

Q: And somehow when the multi-currency regime was introduced, the massive hyperinflation which was tearing the economy apart, disappeared overnight. How was that possible?

A: It was merely a base that we were using which changed. There was nothing magical about it. Where we needed one trillion Zim dollars to get one US dollar, we now decided to talk about the US dollar alone, no reference to the Zim dollar.

It doesn’t mean much, it is simply the currency of measurement and transacting which changed. The mindset did not.

And here is the dichotomy, which is the question that I want to throw back to those people who believe or believed that Gono was the problem.

Here is the mantra that was sold to people in 2009: One, “For us to do well in this country, for us to enjoy life and prosperity, Gono must go.”

Two, “Gono must stop printing currency.”

Three, “The Zim dollar must go.”

Four, “Gono must stop quasi fiscal operations”. Five, “Gono’s powers must be clipped.
Once these (priorities) are done, we shall live happily ever after.”

So, since 2009, Gono never printed a single- penny. Gono never undertook any quasi-fiscal operation. Gono’s powers were clipped. For the last six months, from January to June 2014, Gono is nowhere to be seen.

But what is the situation now?

People are worse off than when Gono was there

The capacity utilisation of factories has gone so low, (30 percent) that you can’t believe it; it is the lowest since records began.

Poverty levels are far, far higher than they were in 2008.

The banks can’t get any money. Civil servants, soldiers, police, pensioners, war veterans, and the rest of them are not getting their pay and pensions on time. But Gono is not there. (Gono is gone!)

In 2008-09, it was also said that if our inflation were in single digits, we would live happily ever after.

Our inflation today is below 0.5 percent, not even 1 percent. It is actually better than America’s! But we are worse off.

Our budget deficit is serious, our import bill is serious, our balance of payment position is worse!

Similarly, unemployment is high, every week people are losing their jobs.

You can’t look at our social poverty statistics, it’s terrible. And order is nowhere in sight. It shows the laziness in the thinking of people.

There are fundamental issues that have remained constant with or without Gono, and those are what must be tackled, not personalities.

We are not singing from the same hymnbook. It is the politics again! The sanctions are there, and we are witnessing the futility of trying to turn around our economy in an environment of pointless conflict.

Q: Given what has happened to Zimbabwe in the last 14 years, do yon still have faith in the international financial system?

A: Yes, there are no two ways about it. We have a role to play and we shall play it as a giant. We have just been asleep and elephant riders know when to ride an elephant.

It is when it is on the ground, when it is asleep.

That’s the best time to ride an elephant because when it rises, it will rise up with you.

By this I mean there are people out there who do not see the opportunities in Zimbabwe now. They can only do well if they ride us at this stage, not later.

Q: Again, towards the end of your tenure, you appeared to be against the indigenisation of the banks, why were you standing in the way of a national policy?

A: Section 6 of the Reserve Bank Act imposes a statutory duty on the governor to be an advisor to the government on all matters financial.

Therefore, if I see, or saw, danger in any government policy or programme, however, noble, it was my duty to point it out;and that is whatI simply did, without fear or favour.

Q: In 200, Tendai Biti, (a lawyer) who was then the secretary-general of the opposition MDC-T, threatened that if they ever came to power, they would hold you to account.

Recently it was reported that you have hired Biti as your lawyer to defend you in court. Is it a matter of politicians having no permanent friends or enemies but permanent interests?

A: Well, Tendai Biti is a Zimbabwean who practices law in Zimbabwe. I am a consumer of legal services from practitioners registered in Zimbabwe.

And it is in our national Constitution that freedom of association is guaranteed.

It is also an aspiration of all Zimbabweans that we live in harmony at all times.

It is also not unheard of that people who had misunderstandings yesterday find each other, and it is precisely what has happened between Biti and me.

We have found each other.

We had terrible fights before we found each other.

And when we did, this was not on the basis of trading secrets about each other’s party. No, it was putting Zimbabwe first; it was about the interests of the economy.

What you may not know, and which I will tell you today, something which Biti himself and others can confirm, is that our sharp differences and animosity towards one another, our dangerous hatred of each other, was for the greater part of 2009 coming in the way of progress for the economy.

It is of importance for your readers to know that monetary policy cannot succeed where it is fighting fiscal policy, equally, no finance minister can succeed in his core business when he is at variance with his central bank governor.

It is this time-tested wisdom that was brought to our vivid attention one Tuesday in December 2009.

Biti and I were summoned by the Top Six to a meeting chaired by president Mugabe at which the riot act was read to us in no uncertain terms.

That we either had to work together or be fired together without exception!

The Top Six were president Mugabe and his two vice presidents, and Prime Minister Tsvangirai and his two deputies.

They told us to go and work together, from 2010 onwards, for the general good of the economy or be jointly fired.We hugged each other in the presence of the top Six and pledged to work together, and indeed we found each other.

He is a wonderful, highly principled, brilliant lawyer, and a consistent brother once you get to know him.

So our coming together was a combination of direct instructions as well as generally finding each other.

And when we found each other, we realised that we had more in common than otherwise.

So from 2010 onwards, we listened to our seniors and as good cadres started working together.

There was no selling out involved between us as some people have claimed.

Our relationship is purely professional and we do not debate politics when we are together.

Biti does not sell out any MDC’ secrets, and I don’t.

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