Calls for Gono’s departure are reaching a crescendo with the editor of the Zimbabwe times being asked to provide a platform for publishing allegedly incriminating evidence against him. Many seem to want Gono to go because he can't work with Biti, or he is a member of the JOC.
My view is that Gono should go simply because he is hopelessly incompetent. He is totally ignorant and has survived this far because he is working with equally ignorant if not more ignorant people. Anybody with a single molecule of knowledge in their brain would have realized that Gono was leading us up a creek a long time ago.
He has absolutely no idea how to interpret simple economic data and fit it into a simple economic model. Instead of using numbers to model the economy he tried to force the economy to model numbers. That is a completely wrong approach to simple Mathematical modeling which is the basis of scientific analysis including econometrics.
Gono would set a number such as an exchange rate and then try and force the economy to conform to the number he had set. This was simply wrong. You derive your formulae and numbers so that the numbers reflect certain physical characteristics of the situation you want to mathematically analyze. Taking measurements from the physical situation you then calculate your numbers. You don't set your numbers and then try and force the physical situation to change to conform to your numbers.
Let me try and put it very simply. Suppose you want to measure how much meat you can harvest from a herd of cattle. You know each cow weighs about 250kg and has 4 legs. You then come up with a device for counting the number of legs as cows walk past. If you count 8 legs you know you have 2 cows and a potential 500kg of meat. The model is very simple. The numbers in the model are derived from physical characteristics of the cow. Four legs equal one cow yielding 250kg of meat. Eight legs equal two cows yielding 500kg of meat.
What Gono did with the exchange rate was that he decided that he would define one leg as one cow. He apparently thought that his model would now make eight legs equal eight cows therefore in the end he would get 2000kg of meat!!! Lost to him was that mere definition does not change the physical characteristics of a cow. If one American dollar is worth a thousand Zimbabwe dollars, decreeing that one American dollar be worth a hundred Zimbabwe dollars will not change the physical characteristics of the economy.
The exchange rate is a function of the balance of payments. How much you are producing and selling outside versus how much you are importing by and large determines the value of your money relative to other currencies. If you are producing too little and importing too much your currency devalues. It is a very simple model to understand even without going through Mathematical calculus that real economists use to make accurate predictions of economic trends.
If you reduce production by hindering producers, for example through price controls, at the same time increasing imports by importing all kinds of luxury goods, cars and even simple to make things like scotch carts and ploughs, your currency devalues massively. Setting the exchange rate at some number won't help an iota. It doesn’t matter whether you throw bones, consult tarot cards, peer inside crystal balls or climb up rocks barefoot to come up with the number. The exchange rate is modeling the physical characteristic which is exports versus imports. Its real value will always depend on the balance of payments not wishes of people.
Setting the exchange rate was wrong. Price controls made the situation even worse. To go back to our analogy of a herd of cows, price controls were like splitting the legs of cows into two halves hoping that as each cow passed, you would then count eight legs, and then claim to have 4000kg of meat from two cows. Of course you will discover that after cutting their legs the cows bleed to death leaving you with no meat at all!
After imposing price controls our producers bled to death leaving Gono and the government without a tax base at all.
While many people argue for Gono’s departure based on his political affiliations and his relationship, or lack thereof, with certain politicians, I am of the opinion that the major reason why he should depart is his lack of performance.
To put it simply it doesn’t matter whether Gono is a member of Zanu-PF, the MDC or even the Democratic Party of America. The reason why he should depart is his incompetent management of the monetary system, as well as destructive interference in other areas where he had absolutely no business poking his nose into, such as agriculture.
There are many who defend the governor by claiming that he couldn't have done anything as he was under political pressure. Gono was and is employed to advise politicians correctly, not for HIM to be advised incorrectly by politicians. There are some basic principles of econometrics that cannot be changed by politics, and if he didn't know how to put those across to politicians, it is further proof that he was incompetent.
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