Zimbabwe’s central bank took hundreds of millions of euros from private bank accounts, including 300,000 euros from a bank account belonging to Hivos, a Dutch development organisation. Corina Straatsma, director of Hivos’ regional office in the Zimbabwean capital, Harare, says 90,000 euros is still missing although the rest has been paid back.
Dr Gideon Gono, governor of the Reserve Bank of Zimbabwe (RBZ), released a statement on Monday admitting that the bank took hundreds of millions in foreign currency from private accounts without either the permission or the knowledge of the account holders. According to the statement, the government needed the money in order to fund loans to state-owned companies and buy grain and energy supplies. According to Mr Gono,
“the unorthodox measures helped keep the country afloat”.
Hivos pressuring MDC
Hivos, which is largely dependent on subsidies from the Dutch foreign affairs ministry, is pressuring contacts within the Movement for Democratic Change (MDC) to try and get its money back. Last February, the MDC joined a unity government with President Robert Mugabe’s long-governing ZANU-PF party. According to Ms Straatsma, “The MDC is aware that Zimbabwe needs foreign aid and knows that this situation cannot continue indefinitely”.
Mr Gono promised that the RBZ will repay the money – estimated at 1.5 billion euros – it took from private bank accounts but he did not say when it would actually be repaid. Most of the plundered accounts belong to private companies and non-governmental organisations (NGOs) such as Hivos. Last year, the Global Fund to Fight Aids, Tuberculosis and Malaria said 5.64 million euros was missing from its bank account in Zimbabwe. The money has since been returned.
The Zimbabwean government will have to repay almost one billion euros to the RBZ before the central bank can itself repay the money ‘borrowed’. However, the government does not yet have that money.
Local NGOs also affected
Apart from Hivos, Dutch aid organisation SNV also has an office in Zimbabwe. Although SNV’s bank account was not raided, local manager Rik Overmars says numerous local NGOs had their bank accounts plundered. SNV is almost completely dependent on Dutch government subsidies.
Ms Straatsma has confirmed that many of Hivos’ local partner organisations had money taken from their bank accounts. Hivos, in co-operation with the United Nations development fund, is attempting to get the money back. Ms Straatsma says the central bank’s ‘move’ has not jeopardised Hivos’ activities. The aid organisation opened a new bank account in neighbouring Botswana, and Dutch government subsidy money was paid into that account.
Governor under pressure
Analysts say Mr Gono’s admission is an attempt to hold on to his job. In September 2008, just before a coalition accord was agreed with the MDC, President Robert Mugabe reappointed Mr Gono to a second five-year term as central bank governor. However, since Morgan Tsvangirai’s MDC joined the unity government in February, there has been considerable pressure on Mr Gono to resign.
The central bank governor is one of the Mr Mugabe’s close allies and his policies have been blamed for the severe economic turmoil in the country. There have been severe food, fuel and cash shortages as well as hyperinflation. The health, education and agriculture system has collapsed and the Zimbabwean dollar became next to worthless. The recent introduction of the US dollar as legal tender has helped bring prices down and there are some goods in the shops again.
South Africa’s finance ministry is investigating the possibility of allowing Zimbabwe to use its currency, the rand, and allowing Harare to join the South Africa, Swaziland and Lesotho monetary union.
Just this week, the new Zimbabwean government called on foreign companies, and in particular South African companies, to invest in Zimbabwe. A government spokesman said,
“It’s an investment well worth risking”.