ZIMBABWE’S CENTRAL bank took foreign currency from the bank accounts of private companies and aid agencies without permission to prop up President Robert Mugabe’s previous government, the bank’s chief has admitted.
In a statement released on Monday, reserve bank governor Gideon Gono, who was recently reappointed for another five years, said the money was taken to help pay for loans to government ministries in the region of $2 billion (€1.5 billion), to ensure they could keep the country running.
He added that the new coalition government, formed last February between Mr Mugabe’s Zanu-PF and the Movement for Democratic Change, still had to repay about $1.2 billion to the central bank before it could repay the companies targeted.
“Immediate reimbursement to the central bank . . . will enable the Reserve Bank to also reimburse all corporate and NGO foreign currency account dues,” the central bank statement read.
Mr Gono went on to say the illegal practice “sustained the country” during desperate times, and he called upon Zimbabweans and the international community to “let bygones be bygones and for everyone and every entity to start anew and open a new page”.
Mr Gono’s statement has revealed that a practice hinted at last year by the Global Fund, an international aid agency, was in fact widespread under Mr Mugabe’s previous regime as a means to replace its dwindling financial resources with more valuable foreign currency.
At the time, the Global Fund threatened to cut off all its funds to Zimbabwe for fighting Aids, tuberculosis and malaria unless the money it said had been taken from its account was returned. The central bank returned $7.3 million to the organisation.
The revelations are likely to increase international calls for Mr Gono, known as Mr Mugabe’s “private banker”, to stand aside.
Potential donor countries and agencies have indicated that Mr Gono’s removal would be a precondition for providing the financial aid needed to revive Zimbabwe’s crippled economy. Among other things, he has been criticised for knocking 25 zeros off the local currency in the past two years as a means to combat hyperinflation.
However, Mr Gono defended his record, saying criticism had reached “ridiculous dimensions . . . in the name of trying to show how evil, unworthy and incompetent the governor is. All this is being done in an effort to show the central bank governor killed the economy single-handedly,” his statement concluded.