US embassy cable - 03HARARE2189

UNCLAS HARARE 002189 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR AF/S 
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER 
USDOC FOR 2037 DIEMOND 
TREASURY FOR OREN WYCHE-SHAW 
PASS USTR FLORIZELLE LISER 
STATE PASS USAID FOR MARJORIE COPSON 
 
E. O. 12958: N/A 
TAGS: ECON, EINV, PGOV, ZI 
SUBJECT: GONO TO RUN CENTRAL BANK CHIEFarer 
21842184 
 
Ref: Harare 2184 
 
1. (U) Summary:  President Mugabe has decided on Jewel 
Bank Managing Director Gideon Gono as the new Reserve 
Bank governor.  Gono's close ties to Mugabe make it 
unlikely he will be an assertive, independent central 
banker. End Summary. 
 
2. (SBU) Since the GOZ eased Leonard Tsumba from the 
governorship in April - three months before his term's 
end - the Reserve Bank (RBZ) has been leaderless.  This 
has complicated the Bank's operations at a time of 
profound monetary and fiscal crises.  We had learned from 
several sources over the past months that Gono was the 
frontrunner.  Apparently, however, he had been trying to 
find a diplomatic way maneuvering out of the appointment. 
 
Comment 
------- 
3. (SBU) Although the GOZ has made no official 
announcement, our latest reports indicate that Gono 
failed to lobby his way out of the job.  Gono will be 
Mugabe's vehicle to shake up the RBZ, announced last 
Friday (ref).  Given the powerlessness of the RBZ 
governor and the sad state of the economy, this is a 
posting that few covet.  Gono would no doubt be happier 
continuing to make money as the GOZ's unofficial banker. 
He controls Mugabe's accounts and maintains a close, 
multifaceted relationship with the President. 
 
4. (SBU) Gono adds little as Reserve Bank governor.  He 
is a self-made man who understands how markets function, 
but his own fortunes have been tied to sweetheart deals 
with the GOZ.  He will not serve as a check on GOZ 
overspending and overborrowing.  In fact, his ownership 
of a commercial bank and the major business newsweekly 
signals a major conflict-of-interest. 
 
Sullivan