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Gono defuses UN pull-out threat
Institute for War and Peace Reporting (IWPR)
Norman Chitapi (AR No. 123, 26-Jul-07)
July 26, 2007

http://iwpr.net/?p=acr&s=f&o=337442&apc_state=henh

Zimbabwe's Reserve Bank governor Gideon Gono last week intervened to avert a possible pull-out of United Nations agencies who had threatened to leave the country because of the government's decision to scrap a scheme which allows fuel purchases with foreign currency, according to diplomats.

Gono organised a meeting between the UN agencies and President Robert Mugabe, who reassured them that a particular international fuel procurement company would be exempt from the ban of July 18 - which removes one of the last ways available for people to buy fuel, a diplomatic source told IWPR.

"All United Nations agencies - United Nations Development Programme, World Food Programme, United Nations Children's Fund, World Health Organisation - wanted to pull out. A meeting had to quickly organised with the president who reassured them that they would not be affected and would continue to get their fuel from their suppliers," said the source.

The source added that some embassies were threatening to relocate to South Africa. "The fuel directive was the last straw. We are already working under very difficult circumstances," he said.

Zimbabwe has been facing an acute fuel shortage for the past eight years, part of a wider economic crisis, which many blame on the Mugabe government.

The scheme allowed fuel purchases with foreign currency coupons either from private oil companies or individual importers. All businesses have now been ordered to redeem fuel coupons within two weeks.

Diplomats and employees of international aid organisations also rely on the scheme to purchase fuel.

The government gave no reason for its decision to end the scheme, but has accused people of buying coupons and reselling them at astronomic prices, thus contributing to skyrocketing inflation.

The decision follows a June 26 government directive in which Mugabe ordered retailers to slash prices by 50 per cent to June 18 levels, in a bid to counter inflation.

Gono, whom analysts say is growing increasingly frustrated with government's ad hoc economic policies, reacted with anger to the announcement that the fuel scheme would be scrapped.

"Everything needs to be properly dissected, looking at the pros and the cons so that we do not make rushed decisions," he said.

"We have hindered people from going about their normal business."

The announcement has prompted panic-buying, as motorists scramble to fill up their vehicles and other containers. Some companies, which already had huge reserves for their own use and for their employees, brought up to five
210-litre drums to service stations to redeem their coupons.

"This is nothing short of madness," said Nhamo Msando, a motorist at the Caltex service station in the suburb of Bluffhill, commenting on the huge containers people were bringing to collect their allocations. "Where are expected to stock all this fuel?"

"The number 18 will soon become a swear word in Zimbabwe," chipped in Stephen Moyo, who had three drums on the back of his truck. "On June 18 it was the price of basic commodities; today it is fuel. What will they have for us on August 18?"

An owner of a construction company said the fuel move would prove detrimental to the economy, "I rely on these fuel coupons. I have projects in Ruwa, Norton and all over Harare. I was so angry when I read the minister's announcement. Out of everything that has happened, this has angered me the most.

"How does government expect us to conduct business without fuel? And again, it has made an announcement before putting in place contingent measures to ensure that there is a constant supply of the fuel."

A political analyst said the government was leaping from one problem to another without any idea of what they want to achieve.

"It is a rollercoaster and we are on autopilot. The government cannot hope for economic recovery through these disruptive measures," he said.

Norman Chitapi is the pseudonym of an IWPR reporter in Zimbabwe.

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