US embassy cable - 05PRETORIA3628

C O N F I D E N T I A L SECTION 01 OF 02 PRETORIA 003628 
 
SIPDIS 
 
DEPT FOR AF/S B. NEULING AND M. TABLER-STONE, EB/IFD, EB/OMA 
LONDON, PARIS, BRUSSELS FOR AFRICA WATCHERS 
 
E.O. 12958: DECL: 09/07/2015 
TAGS: PREL, PHUM, ECON, EFIN, KDEM, ZI, SF 
SUBJECT: GONO SAYS NO ADDITIONAL IMF PAYMENT; SEEKS 
WASHINGTON MEETING 
 
REF: PRETORIA 3543 AND PREVIOUS 
 
Classified By: Charge d'Affaires, a.i. Don Teitelbaum 
Reasons 1.4(b) and (d) 
 
1. (C) Summary:  Zimbabwe will not/not make an additional $50 
million payment to the IMF before the September 9 Executive 
Board meeting, according to Zimbabwe Reserve Bank Governor 
Gideon Gono.  Gono would like to meet with U.S. officials on 
the margins of his IMF consultations in Washington, but 
requested that any talks be "very discreet," suggesting that 
he does not have President Mugabe's approval for the meeting. 
 South Africa Minister Erwin confirmed publicly September 9 
that the "difficult discussions" with Zimbabwe on a potential 
South African loan were continuing.  Gono said the political 
conditions were the sticking point and suggested that the 
revival of the ZANU-PF-MDC "compromise constitution" was 
Pretoria's key political condition.  Information received 
through Embassy source has been accurate in the past, but we 
cannot discount the possibility Gono misled source on this 
occasion.  End Summary. 
 
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No Additional IMF Payment 
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2. (C) Zimbabwe Reserve Bank Governor Gideon Gono told 
Embassy contact Sydney Masamvu of the International Crisis 
Group (strictly protect) September 7 that despite press 
reports Zimbabwe will not/not make an additional $50 million 
payment to the IMF before the September 9 Executive Council 
meeting.  (Note: South African newspaper Business Day 
reported September 7 and 8 that Gono and Finance Minister 
Herbert Murerwa planned to "personally take the $50 million 
cheque to the IMF," a payment that would be in addition to 
the $120 million Zimbabwe paid on August 29.  The article 
claimed that the GOZ raised the funds from the "local 
exporters' foreign currency account."  End Note.) 
 
3. (C) IMF Resident Representative in South Africa Vivek 
Arora (strictly protect), who was a member of the IMF team 
that recently visited Zimbabwe, told EconOff September 7 that 
he also was not aware of any additional planned payments to 
Zimbabwe's General Resources Account (GRA) at the IMF.  Arora 
observed that if Zimbabwe did pay all its arrears on its 
General Resources Account (i.e., the remaining approximately 
$50 million) there would be no legal basis for expelling 
Zimbabwe from the IMF.  Arora said that last week's $120 
million payment and accompanying macroeconomic policy changes 
were probably sufficient to stave off expulsion, but that was 
up to the Executive Board.  Arora dismissed press speculation 
that he took part in the recently-concluded IMF Mission to 
Harare to coordinate the IMF and South African Government 
plans for Zimbabwe.  According to Arora, the IMF team simply 
needed another senior official present.  He also complained 
that "about 70 percent of what appeared in local newspapers 
about the IMF mission to Zimbabwe was rubbish." 
 
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Gono Seeks Washington Meetings 
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4. (C) Gono told Masamvu that he would like to meet with 
senior U.S. officials during his trip to Washington.  (Note: 
We understand that Gono departed Harare for Washington the 
evening of September 7.  End note.)  Gono stressed that any 
such meeting would have to be "very discreet."  He suggested 
meeting the U.S. officials at the IMF, including perhaps the 
U.S. Executive Director.  Masamvu said that Gono was nervous 
about meeting U.S. officials because he did not have the 
consent of President Mugabe.  Characterizing the Zimbabwean 
Ambassador to Washington as a "Mugabe man," Masamvu said that 
Gono feared that the Ambassador might report any unauthorized 
Gono meetings to Mugabe. 
 
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South Africa Loan Talks Continuing 
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5. (C) Gono confirmed to Masamvu that the Zimbabwe-South 
Africa loan discussions were ongoing.  He said that there was 
agreement on the economic conditions, but the political 
conditions remained the sticking point.  Gono said that 
Pretoria was pushing for a revival of the draft compromise 
constitution that Justice Minister Patrick Chinamasa and MDC 
Secretary General Welshman Ncube negotiated last year. 
 
SIPDIS 
Mugabe will appoint a two-member team to negotiate the 
political conditions; Finance Minister Murerwa (a "political 
lightweight" according to Masamvu) would not be part of the 
team. 
 
6. (U) In September 7 parliamentary briefings, South African 
Minister of Public Enterprises Alec Erwin was quoted in the 
press as having said that the "difficult discussions" with 
the GOZ on the proposed South African loan were continuing. 
Erwin said that Minister of Finance Trevor Manuel and Reserve 
Bank Governor Tito Mboweni were taking the lead on the talks. 
 He suggested that the initiative for the loan now lies with 
Harare; the loan "is not something South Africa has to 
drive."  Erwin also said "if and when" an agreement is 
reached, the SAG would reveal the basic conditions of the 
loan, although some elements would be kept secret in the 
interest of market security. 
 
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Comment 
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7. (C) Information from Gono through ICG's Masamvu has proven 
accurate in the past.  Gono knows that Masamvu talks to the 
U.S. Embassy in Pretoria, and it is possible that Gono misled 
Masamvu on the additional $50 million to enhance the "element 
of surprise" when he announces the payment at the IMF Meeting 
in Washington.  Other possibilities are that GOZ officials 
floated the $50 million story to undermine lobbying for 
Zimbabwe's expulsion at the IMF, or that Gono is being kept 
in the dark about the rumored payment. 
 
8. (C) Gono's report that the South Africans are demanding 
the revival of the "compromise constitution" as a political 
condition of their loan rings true.  Advocate Gumbi told 
Ambassador Frazer August 19 that South Africa will push for 
the GOZ to accept at least elements of the negotiated 
constitution.  President Mbeki said that demands are likely 
to be couched as "voluntary" moves by the GOZ.  The SAG is 
painfully aware, however, that the $120 million IMF payment 
undermines their leverage in the ongoing loan discussions. 
TEITELBAUM