Cabinet this week approved a new policy that will see loans and financial aid to Zimbabwe NOT going through the Reserve Bank. The MDC has argued long and hard that central bank governor Gideon Gonos quasi-fiscal activities and raiding of private foreign currency accounts have irreparably damaged the reputation of the bank. They also argue that this is hampering eBut in a move signaling a looming compromise, the coalition government has now approved the establishment of a Multi-Donor Trust Fund within the Ministry of Finance. This is being seen as an attempt to placate donors who are reluctant to put money into a system controlled by Mugabes money man. The trust fund we are told will be co-chaired by Tendai Bitis Finance Ministry and other developmental partners. Two other ministries, Local Government and Regional Integration and International Cooperation, will be part of a core group administering the fund.
Speaking during his tour of the United States, Prime Minister Morgan Tsvangirai said the Multi-Donor Trust Fund, will be administered by international donors. He said the fund met the donors criteria for accountability and this will help support the countrys economic recovery programme. Biti tried to be diplomatic about the fund being a means to bypass Gono. On Thursday he told us it was a stop gap measure for receiving donor aid during this situation of fragility. He reiterated that Gonos presence at the RBZ remained an outstanding issue for the coalition.
Meanwhile the weekly Zimbabwe Independent newspaper reports that Biti has won his battle for control of Treasury and that Gono was now keen on improving relations with his boss. Biti has been fighting the battle mainly in cabinet and has got support for far reaching reforms via the Reserve Bank of Zimbabwe Act. The paper says the two held a private meeting on Monday in an effort to improve their working relationship. Gono is also said to have apologized for an acrimonious letter he wrote to the Prime Minister, which was published by several media outlets.