Gono Really Wants To Protect His Banks; Asks Mugabe To Intervene

Reserve Bank of Zimbabwe Governor Gideon Gono has escalated his power struggle with Indigenisation and Empowerment minister Saviour Kasukuwere over banks by asking President Robert Mugabe to intervene.

Just the day before yesterday Kasukuwere gave foreign banks a year to make sure that their equity was in line with the indigenisation law which requires them to have 51% local ownership.

Gono hit back and said that Kasukuwere and National Indigenisation and Economic Empowerment Board chairperson, David Chapfika were not fit and proper persons to deal with banks. He made reference to the fact that both men had presided over the failure of their banks – Chapika at Unibank and Kasukuwere at Genesis –  and so were not the best to make decisions of this nature.

New Zimbabwe quoted him as saying:

Ordinarily, anyone who was near a failed bank is not a fit and proper person to deal with banking matters or to ever own, run or talk about the ownership of a bank again until cleared by the central bank; his is a universal practice.

Then he brought out the big gun:

I will soon be consulting with and obtaining further guidance from President Mugabe on the latest moves by the Minister in relation to the sector that I superintend, the Banking Sector, and his instructions will be final in the manner in which we will proceed.

That is essentially like two kids fighting and one decides to go and tell dad.

Kasukuwere says he is simply implementing the law but Gono and his boss Finance Minister Tendai Biti think otherwise. They favour a supply chain model where institutions will be forced to buy from indigenous suppliers. They say the equity model will destabilise the banking industry.

We wonder what the president will say. We will have to wait though because he is currently in Singapore. He is due back this Satuday