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Gideon Gono: The Governor who Printed Money to Avoid a Coup

Harare - “If we had not done what we did printing money and allowing inflation to skyrocket, then the men and women you see in those beauti...

Harare - “If we had not done what we did printing money and allowing inflation to skyrocket, then the men and women you see in those beautiful uniforms, they were ready to get out of their barracks.” 

These words were part of a confession by former Reserve Bank Governor (RBZ) and retired president, Robert Mugabe's personal banker, Gideon Gono told a business gathering recently.

Gono admitted he was forced to print money, knowing it would fuel inflation, in order to avert a possible coup by hungry soldiers, meaning Operation restore Legacy would have happened earlier than 2017.

“Operation Restore Legacy would have happened much earlier, but not one that we would have been commanding ourselves. It would have been a ‘restore legacy’ that would have been commanded from elsewhere. I had the privilege to come face-to-face with hungry men and women in uniform.
Robert Mugabe and Gideon Gono
“I had the privilege to visit each and every barrack in this country to come face-to-face with hunger, hunger that was affecting men and women who have nothing else but their AKs; men and women who, if we did not do what we did, could have been tempted to get out and look for some food by whatever means,” Gono was quoted by the Standard.

The banker confessed he did not have resources to do his job during his tumultuous tenure at the central bank.

“I was given a car, which did not have fuel and expected to get to a certain destination. You drive on empty. Ours was not an ordinary situation, ours couldn’t be compared to any other country or any other situation,” he said.

“Any attempt to get money was met with blockages. Faced with a situation that we were in, we chose to allow inflation to go the way it went as long as we preserved the lives of our people.”

Gono said most of the time they could not tell Zimbabweans the truth that the country had no fuel or medicines fearing unrest.

Gono was the Governor of the Reserve Bank of Zimbabwe (RBZ) from 2003 to 2013 and is the former CEO of the Jewel Bank, formerly known as the Commercial Bank of Zimbabwe. He became known internationally due to his connection to the hyperinflation in Zimbabwe.

Gono started his career as a tea boy at National Breweries in Kwekwe in 1977. He put himself through various correspondence courses from O-Level through A-Level and moved on to the Zimbabwe Fertiliser Company as a Bookkeeper. 

After working at Van Leer as an accountant, he was appointed finance manager at the Zimbabwe Development Bank (ZDB) in 1987. When he left the Zimbabwe Development Bank in 1995, he had risen to the post of general manager.

The RBZ printed large quantities of money to keep the economy afloat against the backdrop of economic sanctions placed upon the Zimbabwe since 2000. 

This went against the advice of global economists, but with full support from President Robert Mugabe. As predicted by the textbook quantity theory of money, this practice devalued the Zimbabwean dollar and caused hyperinflation.

The RBZ demonetized old bank notes on 1 August 2006 and introduced a new currency. Each new Zimbabwe dollar was worth 1 000 old Zimbabwe dollars. The highest denominations for the new currency were 1, 10, and 100 thousand revalued dollars.

A year later on 1 August 2007, he authorized a 200 thousand dollar denomination. This marked the start of a series of new denominations issued in rapid succession, including 250, 500, and 750 thousand dollars (20 December 2007). 

From the time of currency revaluation to the beginning of June 2008 the money supply in the country increased from billion to more than quadrillion, or a 20 000 000 fold increase. - Online Sources 

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