Former RBZ Governor Gideon Gono, the man most people blame for causing Zimbabwe’s last economic collapse has penned an article in the Sunday Mail attempting to defend his disastrous Farm Mechanisation Program that left tax payers having to foot a bill of more than a billion US dollars. In the article the former governor falsely claims that beneficiaries of the program were not required to pay back the money as this was the nature of the scheme which he says was in national interest.
At independence, the RBZ and Government in general assumed loans and obligations that had been incurred by the previous regime, some of which had been used to acquire military equipment that maimed and killed our people as well as agricultural loans that had been taken with State guarantees from banks during those difficult years.
None of these belonged to blacks. Today, under a legitimate Government Mechanisation Programme that covered both A1 and A2 farmers during a very difficult period in the history of our nation becomes a scandal?
Both rural and non-rural farmers benefited from the takeover of the loans by the State but I shall elaborate. There was no scandal here, no corruption and no beneficiary refused to pay. The State did not demand payment and that was above boar
Part of Gono’s bizarre defence
Gono’s famous Casino economics and quasi-fiscal policies are often blamed for causing the collapse of the economy. As a governor he was often an enable when it came to wild government spending. This spending was often done in an opaque manner with the opaqueness sanctioned by the political elite who were often beneficiaries of such schemes. In 2015 RBZ governor Mangudya refused to name the beneficiaries of the mechanisation scheme claiming they had the right to privacy even though the public was now being saddled with their debts. A quick perusal of the list shows why the governor was unwilling to publish the list.
While the former governor is right that the assumption of debts and even the scheme itself was legal it does not detract from the fact that this was an act of government sanction looting. The elite conspired to act in ways that do not benefit the general populace. It’s not the first time this has happened nor will it be the last.
The elite did not want to pay back the money
While the money was initially given as a loan. The elite who did not want to pay back the money wanted it to be turned into a national project grant. This started when the exchange rate was adjusted from US$1:$30 000 to US$1:$210 million in 2008.
Some quarters in government are now pushing for the farmers to pay as little as $2 billion for a tractor that costs US$40 000 on the open market.
Other government officials are understood to be pushing for a total write-off of the debt as they argue that most farmers will not be able to pay the new prices which have been pushed up by the movement in the exchange rate.
They want the programme to be treated like a national project which government undertook to help farmers.
This proposal is tied, of course, to political support for the government.
Financial Gazette 2008
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