The Zimbabwe Gazette

Gono vs Finance Minister: Another Clash Looms
Friday, 23 November 2007

Zimbabweans will have a bleak festive season following revelations that the Reserve Bank of Zimbabwe is not in a hurry to address the cash crisis that has hit the market.Many people have been forced to forgo crucial transactions due to the shortage of cash that has seen banks limiting their daily withdrawal ceilings to only $5 million per individual.

By Talent Tsatsa Average reasonable transactions for business people exceed $100 million per day and many businesses have been crippled due to the cash shortage but Reserve Bank Governer, Gideon Gono on Tuesday told the press in Harare that he was adopting a back seat stance to the current crisis. He said the bank would have to wait and see what happens to the market under the crisis. {mosgoogle right}Sources close to the development indicate that the development is likely to ignite another clash between the central bank and the Ministry of Finance ahead of the national budget presentation penned for November 29. The ministry of finance on Tuesday announced that its minister, Samuel Mumbengegwi would present the budget to parliament on the mentioned date. Reliable sources indicate that Gono was headed for another showdown with the ministry of finance as he deliberately ignored the cash crisis in order to put pressure on Mumbengegwi during the budget presentation.“The budget will be presented in a timid environment that he has been spurred by the cash shortages. Presenting a budget under such straining economic situation will give Mumbengegwi a lot of pressure and it is Gono’s plan to expose the finance minister as an amateur in economics,” said a source. Gono last year clashed with former finance minister Herbert Murerwa who was forced into resignation due to the conflict. Analysts say sharp differences between Murerwa and central bank chief on how to run Zimbabwe's embattled economy might have influenced Mugabe's decision to accept Murerwa's resignation from the government. Murerwa is understood to have tendered his resignation letter in January in what the analysts said was a victory for Gono. Now Gono seems to be sharpening his sword for Mumbengegwi who has no experience in economics and was reported to have failed to run a personal tuck-shop. In the budget, Mumbengegwi will have a mountainous task to take note of the current challenges facing the country with special emphasis on the availability of basic commodities. The Finance Minister is also expected to come up with measures that will arrest hyperinflation, address the balance of payment deficit, foreign currency shortages, pricing distortions, diminished export viability, low capacity utilisation in key productive sectors among other issues.

Powered by Joomla!

Generated: 4 December, 2007, 19:07