Full text of Gono's Project Sunrise review
This is the full text of Reserve Bank Governor Gideon Gono's Review Statement to Stakeholders on Project Sunrise 1 (Zuvarabuda-Ilanga Seliphumile) issued Friay:
By Dr Gideon Gono
INTRODUCTION AND BACKGROUND
1. Ladies and Gentlemen, it will be recalled that we had several meetings in this room and outside to deliberate on the issue of ZEROES.
2. We had several meetings in and out of this room to debate on the way forward regarding our currency denominations, our computer digital capacities and the inconvenience associated with carrying too much cash around.
3. At one of the large meetings here, stakeholders urged the Reserve Bank of Zimbabwe to take a leadership role in dealing with this matter, raising the matter from yellow to a red flag in terms of national priorities.
4. Well, Ladies and Gentlemen, it gives me a great sense of national pride to share with you my Report on the interim review of the implementation of Project Sunrise – Zuva Rabuda – Ilanga Seliphumile which has been part and parcel of our daily lives since I presented my Monetary Policy Statement on 31 July, 2006.
5. I wish to say upfront that taken as a whole, the unprecedented and much needed Project Sunrise which has seen the replacement of the old bearer notes with a new user friendly and economically convenient family of bearer cheques has been a resounding national success for which all Zimbabweans must be proud for having played their part positively.
6. This is particularly significant because the whole effort was planned and undertaken as a truly home grown and home driven national initiative without any external help.
7. However, looking back, many in the nation will testify to the fact that the surprise policy announcement I made on that day signaling the momentous transformation from our previous bearer notes which had become too cumbersome to carry and which had become a major risk to many of us, was greeted with mixed emotions depending on whether or not one was operating their own “illegal mini central bank” out there, something which was becoming the unacceptable norm.
8. As with any pioneering national initiative with far reaching reform implications designed to alter and ameliorate people’s socio-economic life for the better, Project Sunrise predictably met with doomsday prophecies of impending failure, looming chaos in the financial and banking sectors and even imminent so-called cash riots in the streets.
9. Other ill-wishers amongst us went as far as vowing to do everything in their power to reverse what they dismissively labeled as “this ill-timed, ill-planned and logistically impossible wishful project”.
10. The skeptics of Project Sunrise, many who now also happen to be sworn enemies of our ongoing comprehensive economic turnaround efforts, had a number of negative questions including the following:
* How will the Governor and his team cover the breath and depth of this vast country in 21 days?
* Will they have sufficient new currency to replace the trillions of the former bearer cheques circulating out there?
* Who will print the new bearer cheques for them?
* Where will they get the transport, communication and organizational resources needed to mount such an unprecedented project?
* And how will they manage alone without technical support or backup from the IMF, the World Bank or some developed countries with proven experience in similar projects?
* Are the planners of this project sane people?
11. Yet some others with diminished self-esteem wondered how the banking and financial sectors would deal with the technological challenges associated with all the required computer software adjustments and whether there was adequate foreign currency needed for that necessary purpose.
12. Others thought Project Sunrise was a big self-indulgent experiment into chaos, disaster and assured oblivion.
13. There were some who boasted that the Governor and his team would not get the necessary political will and buy in and these prayed in disillusionment for some forces to prevail on the Governor to stop the train of the necessary currency reform before what was seen as inevitable disaster for the nation.
14. Given the national magnitude of the Project, I believe these and related sentiments of detractors and other skeptics were in fact well-meant as products of genuine anxiety about the prospects of successfully mounting an unprecedented exercise such as we have seen over the last three weeks.
15. The sentiments of the skeptics and detractors revealed genuine concerns about our ability as a nation to undertake and execute such a project for the first time in Zimbabwe’s history on our own without external support.
16. Perhaps the skeptics and detractors will find some solace in the confirmation that indeed, the Governor and his team at the Central Bank shared the expressed concerns and anxiety…, with the difference that he and his team relied on one crucial and yet often ignored factor in human affairs… our trust in the will of God.
17. We reasoned that if, as we believed, God is on our side in this Project, particularly given the sincerity of our planning efforts and the purity of our intentions, underpinned by the resilience and the never-say-die spirit of our liberators who through their blood, sweat, tears and effort, coined the phrase that “we are our own liberators”, none of the projected chaos and collapse would ever see the light of day in a thousand years.
18. It was this deep-seated faith and belief in ourselves as Zimbabweans and the constant flow of inspiring words and supportive deeds from the majority in our nation that kept us going and working hard to the call of duty.
NEGATIVE AND POSITIVE ENCOUNTERS
19. But of course we did encounter inevitable challenges and stakeholder misunderstandings along the way. We also met with understandable reluctance on the part of some stakeholders to take the plunge into what to them was an unknown abyss.
20. At the extreme end, we met with fierce resistance, brick-bats, name calling and came face to face with naked personal hatred, smear campaigns through the rumour mill and physical-harm as well as death threats directed at the person of your Governor and his team from a number of unusual quarters some of which should know and do better.
21. Needless to say, we took all this in our strides, guided by the sincerity of our plans and the purity of our objectives without any prejudice whatsoever.
22. As was witnessed by the nation on various occasions, we also met with incredible national excitement, patriotic enthusiasm and encouraging cheers from the man and woman in the street who has shouldered the greatest burden of the difficult circumstances in our economic environment.
23. We were particularly humbled and inspired by the encouragement and public support from His Excellency President R. G. Mugabe and our two Vice-Presidents Cdes. Joseph Msika and Amai Joice Mujuru.
24. We also received immeasurable support from our Veterans of the Liberation War, leaders and members of Zimbabwe Congress of Trade Unions (ZCTU), Zimbabwe Federation of Trade Unions (ZFTU) and Farmer Organisations, the Zimbabwe Republic Police, the Zimbabwe Defence Forces and the security arms of the state, the Ministers of Finance and Economic Development Dr. Herbert Murerwa and Cde. Rugare Gumbo respectively, the entire Cabinet, legislators, House of Assembly Speaker Cde. John Nkomo and President of the Senate Cde. Edna Madzongwe and their respective staff.
25. We received untold support and messages of encouragement from teachers, nurses and doctors, civil servants, political parties, students and civic organizations across the country.
26. There were also touching prayers from various religious faiths and volumes of both Christian and Islamic readings to guide and strengthen our professional resolve to do the right thing during and beyond the 21 days of the first phase of Project Sunrise.
27. We also received words of encouragement and support from the diplomatic community stationed in Zimbabwe and from some of Zimbabwe’s own diplomats and staff based outside the country. Many Zimbabweans in the Diaspora were very supportive of the objectives of Project Sunrise and our efforts in realizing them.
28. Critical to the success of our efforts, we received decisive support from key stakeholders and partners who included the Bankers Association of Zimbabwe, the Zimbabwe Computer Society, Confederation of Zimbabwe Industries (CZI), Zimbabwe National Chamber of Commerce (ZNCC), Chamber of Mines, Retailers Association of Zimbabwe, academics and many other business entities and organizations too numerous to mention by name.
29. The support which was also received from the Chief Secretary to the President and Cabinet Dr. J. M. Sibanda and his staff, the entire NEDPP, its committees and structures, the Department of Anti-Corruption in the Office of the President and Cabinet , the Anti-Corruption Commission, ZIMRA, the Ministry of Home Affairs, State Security, the Ministry of Youth and Employment Creation, the Department of Policy Implementation in the Office of the President and Cabinet as well as the entire Government and Private Sector machinery, is much appreciated.
30. My Commendations would be incomplete if I omit the entire team of Gary Thompson and Associates for their rare level of creativity, commitment and professionalism in discharging their critical roles throughout the preparatory and implementation stages of the programme. I also wish to thank all Reserve Bank of Zimbabwe staff for their unfailing passion throughout the whole programme.
31. Our outreach efforts were greatly assisted and even improved by the support and constructive criticism that we received from the electronic, print and web based media.
32. We are most grateful for this because we genuinely value the role of the media in currency reform and we therefore look forward to future similar and even better mutual collaboration with the media.
33. No turnaround can be successfully executed without the media playing its constructive role of informing, criticizing, cheering and arguing from different standpoints.
MANY LESSONS LEARNT…
34. The implementation of Project Sunrise over the last three weeks has also provided us with some important lessons that we have learnt. Naturally, some have been positive while others negative. While there is no need to list those lessons here, I want to assure the nation that our institutional databank will store all the lessons learnt as active reference material for future policy reform operations.
35. Against this backdrop I wish to once again thank and salute the nation for smoothly migrating from the old to the new family of bearer notes and for the understanding and patience you showed as you encountered the rough edges of our policy strategy, especially in those instances which we had not anticipated.
36. One such rough edge was the inconvenience of numerous road-block searches and the occasional misunderstandings that occurred there.
37. Whatever bad experiences that some of you experienced at those roadblocks while our teams were carrying out their lawful duties, we sincerely apologize unreservedly. Those unfortunate mishaps, which form part of the lessons we have learnt, vividly reminded us yet again that it is indeed true, after all, that quite often, good things have some temporary hurtful consequences.
UNRETURNED OLD BEARER CHEQUES…
38. Out of about $45 trillion (old values) currency that was in circulation at the time of launching Project Sunrise, a total of $35 trillion (old values) was accounted for through re-banking/withdrawal into the Reserve Bank coffers, leaving a balance of $10 trillion(old values) which has been trapped into the wilderness of underground markets either inside the country or doing overtime outside our borders. This represents 22% of our currency that is missing from our radar.
39. The period under review also netted a total of 9 320 cases with a value of $1,4 trillion (old values) whose owners could not satisfactorily account for this money as at the close of business on 21 August, 2006.
40. Anti-Money Laundering laws will be involved and those unable to acquit themselves will face the full wrath of the law. In the meantime, such funds are locked up in Zero-Coupon Anti-Money Laundering bonds doing national service to the country.
41. I also wish to take this opportunity to warn major cash movers, such as wholesalers and supermarkets that the strengthened Anti-Money Laundering operations of the Reserve Bank will clamp down on those who are bent on fuelling the parallel market through trading of cash to speculators against cheques at discounts.
WAY FORWARD: IMMEDIATE
42. The nation will recall that I mentioned during the initial phase of the implementation of Project Sunrise that as your Governor I would, with my team, keep our ears on the ground to receive and consider exceptional circumstances deserving of further accommodation in the event they are not covered during the designated 21 days.
43. Accordingly, and in consideration of Special Cases that have been brought to my attention by legislators, provincial governors, trade union leaders, the clergy, the elderly, some disabled members of society, teachers in rural areas, traditional leaders led by our chiefs and media houses, we are pleased as Monetary Authorities to open a Special Window of extended accommodation only for the rural, outlying, areas.
44. Given the fact that some outlying areas that are remote were inaccessible during the currency changeover period, with the implementation teams having to filter through into those areas sometimes on foot; and also due to the unavailability of electricity in some rural centers which limited the speed of the counting of cash notes and prevented extension of daily working hours into the night, the following accommodation measures will be implemented for the rural areas.
1. With effect from Monday, the 28th of August, 2006, Reserve Bank teams will revisit reported cases which were not fully covered in the rural areas to carry out a final Mop up Program of the old bearer cheques.
2. The Mop up Program will run through to end of day on Saturday the 2nd of September, 2006.
3. This Mop-up Program, which has also been necessitated by the unfortunate continued re-injection of old bearer notes to the rural communities by some institutional players, such as the Grain Marketing Board and some Cotton buyers, will be strictly restricted to the rural areas only.
45. In order to guard against any attempts by fraudsters and other criminal elements in our midst that may want to take advantage of this well-meaning accommodation of special cases in the rural areas, the Reserve Bank teams will be under strict instructions to scrutinize and verify authenticity of the source of funds in cases of all high value exchanges (that is in cases of amounts that are higher than $100 million (old value per individual).
ALTERNATIVE MEANS OF PAYMENT
46. As the Central Bank, we call upon the banking sector to redouble current efforts meant to deepen the use of alternative means of payment, such as debit and credit cards.
47. Already the Reserve Bank is in partnership with suppliers of point of sale (POS) machines for them to supply these gadgets of convenience to smoothen the interface between our banks and the world of trade and commerce, into cash-free platforms.
ACCESSIBILITY OF BANKING FACILITIES
48. As Monetary Authorities, the intensive and comprehensive implementation of Project Sunrise over the last three weeks brought us to the rude awakening to the reality that the majority of our people in the rural areas do not have access to basic banking services.
49. For example, in some administrative provinces ordinary people have to travel at least 100km to get to the nearest banking facility.
50. This rather shocking reality has impelled your Central Bank to immediately design a comprehensive Rural Banking Developmental Programme to close this yawning deficiency in our national financial system in the interests of the majority of our people.
51. Policy details of this urgent intervention, which is expected to take effect within the next two or so months will be made public in due course.
52. In the meantime, as Monetary Authorities, we call upon the banking industry to expand their corporate social responsibility programmes to include the imperative of developing rural banking as a priority issue.
53. As a Central Bank, we stand ready to play a pivotal and supportive role in that endeavour.
WAY FORWARD: MEDIUM TERM (PROJECT SUNRISE 2)
54. As I mentioned in my midterm monetary review statement on July 31, 2006, the aspect of Project Sunrise implemented over the last three weeks was only the first phase of currency reforms to be undertaken by the Monetary Authorities.
55. A sequel is in the offing but I cannot give further details save to emphasize that there is definitely going to be a follow up phase. Next time round, the implementation process will be short and, therefore swift. It will require less than 24 hours notice and will have much tighter cash limits for allowable deposits.
56. In this regard, everyone, especially those who are now threatening to bring back the banished zeroes through whatever devious means they have in mind, should be guided accordingly.
57. Otherwise, like the rest of the nation, we as Monetary Authorities are only too aware that the Adventure of the Sun is the greatest natural drama that God has created for us as Zimbabweans to live by. It is our God given opportunity to have joy in this adventure, to share in it and to have awe of it. For these reasons, the Monetary Authorities are determined to ensure the full success of all the phases of Project Sunrise.
58. I once again thank and salute you all, gallant sons and daughters of this great country we all love and call, Zimbabwe!
59. Lets meet when Project Sunrise 2 is launched!
DR. G. GONO
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