February 1, 2011

Central bank cuts 75% of staff / Cabinet split over deputy PM position

Zimbabwe's central bank laid off three-quarters of its workforce - more than 1.400 employees - to cut costs, state media reported. "At least 1.455 Reserve Bank of Zimbabwe employees, representing 75% of the staff, will leave the institution … in the single largest retrenchment undertaken in this country since independence," the Herald newspaper said.

The move - which will cost the bank $70-million - follows recommendations that the central back, which had undertaken various quasi-fiscal projects, revert to its core business. "The sad thing, though, is that this realignment is resulting in the loss of jobs," the newspaper quoted bank chief Gideon Gono as saying. "What we have done is to realign the bank in line with the wishes of the legislature."

The affected workers will initially get $5.000 each, with the balance to be paid in the coming months. The mass retrenchment will leave the bank with 493 workers out of 1.948.

Gono was widely blamed for presiding over rampant printing of Zimbabwe's local dollar, which reached astronomical denominations until it was abandoned in 2009. His post remains one of the major sticking points in the unity government between veteran President Robert Mugabe and Prime Minister Morgan Tsvangirai.

In the meantime, sharp differences have emerged in Zimbabwe's unity government over the fate of one of the deputy Prime Ministers who was demoted by his party but has not left his post after receiving support from President Robert Mugabe. Professor Arthur Mutambara who was toppled from the leadership of the small formation of the Movement for Democratic Change in January is supposed to make way for the new leader Professor Welshman Ncube. Prof Ncube announced a fortnight ago that he would become the Deputy Prime Minister while his predecessor would be demoted to a ministerial post following the change in the party's leadership structure. But President Mugabe turned down an MDC request to re-assign Prof Mutambara citing legal reasons. Zimbabwe has two deputy prime ministers, one each from the two MDC factions, following the formation of a unity government two years ago.

Prof Ncube's party has accused Mr Mugabe of tribalism after his refusal to fire its former leader saying in June last year he eagerly accepted a request by Prime Minister Morgan Tsvangirai to reshuffle his cabinet line-up. The smaller MDC has its largest support base in the Ndebele speaking south western parts of the country while Mr Tsvangirai's MDC and Mr Mugabe's Zanu PF draw most of their support among the majority Shona population. Mr George Charamba, the president's spokesman, has dismissed the accusations that Mr Mugabe was being tribalistic and accused MDC of trying to use the veteran ruler to solve its internal problems.

"It is not the business of the president to use his powers as an appointing authority to resolve problems of a political party," Mr Charamba told state media. "Welshman Ncube must deal with the political problem in MDC arising from that party's just ended congress. “That congress yielded a contested leadership and that is not President Mugabe's problem." Mr Charamba said Prof Ncube's best bet was to persuade Prof Mutambara to agree to be re-deployed or leave the inclusive government. Prof Ncube who is currently minister of Industry and Commerce announced a fortnight ago that Prof Mutambara had been redeployed to the Regional Integration and International Cooperation portfolio.
Despite signing a power sharing agreement in 2008 and forming a unity government with his rivals a year later, Mr Mugabe retained the sole prerogative to appoint or fire any cabinet member. The two MDC formations can only make recommendations but not State appointments. (Mail&Guardian/Daily Nation)

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