Identifier
Created
Classification
Origin
09HARARE711
2009-09-04 10:41:00
CONFIDENTIAL
Embassy Harare
Cable title:
GONO STIRS THE POT ON IMF RESERVES
how-toVZCZCXRO8715 PP RUEHBZ RUEHDU RUEHMR RUEHRN DE RUEHSB #0711 2471041 ZNY CCCCC ZZH P 041041Z SEP 09 FM AMEMBASSY HARARE TO RUEHC/SECSTATE WASHDC PRIORITY 4874 INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE RUEHAR/AMEMBASSY ACCRA 3009 RUEHDS/AMEMBASSY ADDIS ABABA 3124 RUEHRL/AMEMBASSY BERLIN 1553 RUEHBY/AMEMBASSY CANBERRA 2387 RUEHDK/AMEMBASSY DAKAR 2754 RUEHKM/AMEMBASSY KAMPALA 3172 RUEHNR/AMEMBASSY NAIROBI 5617 RUEATRS/DEPT OF TREASURY WASHDC RUEAIIA/CIA WASHDC RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK RHMFISS/EUCOM POLAD VAIHINGEN GE RHEFDIA/DIA WASHDC RUEHGV/USMISSION GENEVA 2300 RHEHAAA/NSC WASHDC
C O N F I D E N T I A L HARARE 000711
SIPDIS
AF/S FOR B.WALCH
AF/RSA FOR K.MOODY
DRL FOR N. WILETT
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS
STATE PASS TO NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN
STATE PASS TO HOUSE FOR STEPHANE LEBOUDER
E.O. 12958: DECL: 09/04/2019
TAGS: ECON EFIN PGOV PREL ZI
SUBJECT: GONO STIRS THE POT ON IMF RESERVES
Classified By: Classified by: CDA Donald Petterson, Reason: 1.4 (b)
C O N F I D E N T I A L HARARE 000711
SIPDIS
AF/S FOR B.WALCH
AF/RSA FOR K.MOODY
DRL FOR N. WILETT
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS
STATE PASS TO NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN
STATE PASS TO HOUSE FOR STEPHANE LEBOUDER
E.O. 12958: DECL: 09/04/2019
TAGS: ECON EFIN PGOV PREL ZI
SUBJECT: GONO STIRS THE POT ON IMF RESERVES
Classified By: Classified by: CDA Donald Petterson, Reason: 1.4 (b)
1. (C) Finance Minister Tendai Biti has told President Mugabe
and the Cabinet that Zimbabwe should use its new allocation
of Special Drawing Rights (SDRs) to clear arrears with the
international financial institutions as part of a debt
reduction strategy. Conrad Nyamurova, an adviser to Biti
told us that Mugabe supports this policy, which Biti had also
communicated to Mugabe by letter and shared in Cabinet with
Mugabe and ministers. Nyamurova also said that Biti had
reportedly been in contact with International Monetary Fund
(IMF) staff and an IMF executive director to make it clear
that, despite the fact that no consultation is mandated,
Zimbabwe would not draw on its SDR balance until it had
agreed upon a strategy with the IMF. Biti plans to discuss
this with IMF staff at the upcoming annual meetings in
Istanbul. (NOTE: Biti has also discussed with us and with
IMF staff using part of the SDR allocation for a public
investment project. END NOTE.)
2. (C) The Governor of the Reserve Bank of Zimbabwe, Gideon
Gono, had caused a degree of confusion regarding GOZ policy
on the SDR allocation. In an August 28 letter, Gono sought
to consult with Biti on "how to access these funds
immediately without any media attention." He described the
SDR allocation as "a windfall and break through." On
September 3 Gono made veiled public reference to a new source
of official financing. The next day the state-owned press
gave front-page coverage to Gono's self-proclaimed success in
winning new support from the IMF in a banner head-lined
article, "IMF gives Zim US$500m". Gono falsely claimed in
the article that Zimbabwe had already received the funds.
--------------
COMMENT
--------------
3. (C) While Biti is dealing with this issue within
government, his bigger problem may be with the public if
civil servants, including teachers, believe the government
has received a windfall of support and is not using it to
raise salaries. Nyamurova said Biti would publicly address
the issue in the near future. END COMMENT.
PETTERSON
SIPDIS
AF/S FOR B.WALCH
AF/RSA FOR K.MOODY
DRL FOR N. WILETT
ADDIS ABABA FOR USAU
ADDIS ABABA FOR ACSS
STATE PASS TO USAID FOR J. HARMON AND L. DOBBINS
STATE PASS TO NSC FOR SENIOR AFRICA DIRECTOR MICHELLE GAVIN
STATE PASS TO HOUSE FOR STEPHANE LEBOUDER
E.O. 12958: DECL: 09/04/2019
TAGS: ECON EFIN PGOV PREL ZI
SUBJECT: GONO STIRS THE POT ON IMF RESERVES
Classified By: Classified by: CDA Donald Petterson, Reason: 1.4 (b)
1. (C) Finance Minister Tendai Biti has told President Mugabe
and the Cabinet that Zimbabwe should use its new allocation
of Special Drawing Rights (SDRs) to clear arrears with the
international financial institutions as part of a debt
reduction strategy. Conrad Nyamurova, an adviser to Biti
told us that Mugabe supports this policy, which Biti had also
communicated to Mugabe by letter and shared in Cabinet with
Mugabe and ministers. Nyamurova also said that Biti had
reportedly been in contact with International Monetary Fund
(IMF) staff and an IMF executive director to make it clear
that, despite the fact that no consultation is mandated,
Zimbabwe would not draw on its SDR balance until it had
agreed upon a strategy with the IMF. Biti plans to discuss
this with IMF staff at the upcoming annual meetings in
Istanbul. (NOTE: Biti has also discussed with us and with
IMF staff using part of the SDR allocation for a public
investment project. END NOTE.)
2. (C) The Governor of the Reserve Bank of Zimbabwe, Gideon
Gono, had caused a degree of confusion regarding GOZ policy
on the SDR allocation. In an August 28 letter, Gono sought
to consult with Biti on "how to access these funds
immediately without any media attention." He described the
SDR allocation as "a windfall and break through." On
September 3 Gono made veiled public reference to a new source
of official financing. The next day the state-owned press
gave front-page coverage to Gono's self-proclaimed success in
winning new support from the IMF in a banner head-lined
article, "IMF gives Zim US$500m". Gono falsely claimed in
the article that Zimbabwe had already received the funds.
--------------
COMMENT
--------------
3. (C) While Biti is dealing with this issue within
government, his bigger problem may be with the public if
civil servants, including teachers, believe the government
has received a windfall of support and is not using it to
raise salaries. Nyamurova said Biti would publicly address
the issue in the near future. END COMMENT.
PETTERSON