Fin24

Zimbabwe central bank to cut jobs

2010-12-07 18:30

Harare - Zimbabwe's debt-saddled central bank is to lay off 1 600 workers - three quarters of its staff - in a bid to balance its budget, state media reported on Tuesday.

Gideon Gono, the bank's controversial governor who was widely blamed for presiding over rampant printing of Zimbabwe's now abandoned local dollar which ended in hyperinflation, told the Herald newspaper only 530 jobs would be kept.

"We are looking at retrenching 74% of the central bank's staff," said Gono. "It is not one of the easiest tasks as it is going to be one of the largest retrenchments in the history of the country by a single institution."

In March, the International Monetary Fund said the bank needed a new board to strengthen governance, adopt a sustainable budget, and refocus its role after abandoning the Zimbabwean dollar in 2009.

Gono said most of those likely to lose their jobs had served for more than 30 years. Employees recruited when the bank undertook various non-banking activities at the height of Zimbabwe's economic crisis will also be fired.

Hyperinflation

"We are currently saddled with a huge debt that strictly speaking belongs to government, which stands at $1.2bn dollars," he said.

Gono as the bank's chief was renowned for introducing new Zimbabwean dollar notes in astronomical denominations causing hyperinflation as the economy spiralled downward amid political turmoil, but he remains at the helm.

His presence as the bank's chief remains one of the major sticking points in the unity government between veteran President Robert Mugabe and Prime Minister Morgan Tsvangirai.

Zimbabwe's economy grew by 4.7% in 2009, ending 12 years of contraction during which inflation hit world record levels.

The southern African country's finance minister last month said the economy would grow by 9.3% in 2011 due to improved tobacco production and higher mining output.