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Why Gono's 'sunrise' has turned to sunset
Ndamu Sandu, The Standard (Zimbabwe)
January 06, 2008

Visit the index of articles on currency reform - Sunrise II

http://allafrica.com/stories/200801060015.html

THE Reserve Bank of Zimbabwe (RBZ) allowed the $200 000 bearer cheques to remain in circulation after failing to print enough replacement notes, an investigation by The Standard has established.

RBZ governor Gideon Gono said last month the $200 000 notes' shelf life would end on 31 December last year because unnamed cash barons were holding on to the money.

He announced new $250 000, $500 000 and $750 000 bearer cheques, a stop-gap measure to alleviate the cash crisis.

But last Monday Gono was singing a different tune, saying he had extended the life of the bearer notes as some areas had become impassable because of floods and rugged terrain, which had hindered the movement of the swap teams.

An investigation by The Standard last week revealed the bank's swap teams, sent out to various parts of the country, spent most of their time loitering at growth points or sleeping in hotels as they quickly ran out of new notes to swap with the old bearer cheques.

The teams did not even show up in some areas, sending panicky villagers into shopping sprees to dispose of their hard-earned cash.

In other areas the teams did not have enough cash to swap with the villagers' bearer cheques. Similar reports were received from areas such as Chegutu, Zvimba and Chinhoyi.

Residents in Goromonzi said the team was nowhere to be seen, despite promises it would be stationed at a police outpost.

They said they ended up using the bearer cheques to buy goods, just to beat the 31 December deadline.

"I lost my savings as I ended up buying things I did not want for the sake of disposing of the money," said John Aphiri, who sells mushrooms at the shopping centre.

"Now I have to look for money to pay school fees for my children as schools are opening in two weeks' time."

Another resident, calling himself just Clayton, said he incurred unnecessary expense travelling to Harare to beat the deadline.

At Gosha School in the bustling KwaBhora growth point along the Harare-Nyamapanda road the RBZ team did not have enough of the new notes.

As a result, villagers and general dealers said the team only swapped notes for limited amounts.

"The team would even give one as little as $10 million when they wanted to change as much as $50 million," said a trader at the growth point.

Itai Lindiwe Marekera, who runs a food outlet, said people failed to use their money as most shops refused to accept the $200 000 notes in the run-up to 31 December.

She said: "I accepted the notes as my suppliers, Delta, were accepting them."

In Dema, shop owners recorded low business in the run-up to the deadline.

Gono won the European Marketing Research Centre Africa Award, for instilling discipline in the country's financial sector and also in recognition of his efforts in turning around Zimbabwe's troubled economy.

But observers say he failed to resolve the cash crunch which continued into the New Year.

Observers said Gono must name the so-called cash barons he accused of starving the nation of cash, unless his comments were aimed at "some imaginary culprits".

Analysts say the cash crisis exposed the shortcomings of Gono's administration and the bells could be tolling for him, as his first term in office expires at the end of this year.

Economists and trade unionists have called for his resignation.

Gono was appointed to the job in 2003, as a turnaround specialist, having transformed the then Bank of Credit and Commerce International into the jewel that became the CBZ.

But his magic wand has become rusty, or, much more likely, his luck has run out, just as he was beginning to plan a political career, according to his critics.

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