Clearing World Bank arrears irresponsible: Biti

Source: Clearing World Bank arrears irresponsible: Biti – DailyNews Live

STAFF WRITER      1 May 2017

HARARE – Finance minister Patrick Chinamasa’s planned move to pay $1,1
billion towards settling Zimbabwe’s World Bank dues is “criminally
irresponsible and treasonous”, former Finance minister Tendai Biti has

He said the intended payment will be made on the back of a moribund
economy characterised by massive deindustrialisation, absent aggregate
demand, chokingly high government expenditure and a crippling liquidity

“The repayment of the loan to the World Bank is therefore criminally
irresponsible and treasonous,” Biti said.

Chinamasa has said Zimbabwe has met all conditions to clear arrears to the
World Bank and African Development Bank (AfDB), paving way for possible
fresh lending from the International Monetary Fund (IMF).

The Treasury chief said facilities negotiated by the Reserve Bank of
Zimbabwe to repay the $1,75 billion arrears had been “scrutinised and
scrutinised” by the World Bank and AfDB, who were both satisfied.

“Clearance of debt arrears is expected to open the door to foreign finance
inflows and possible debt treatment by the Paris Club and non-Paris Club
Bilateral Creditors through an IMF financing programme,” Chinamasa said.

He did not give details on where the cash-strapped President Robert Mugabe
government obtained the money from, though, reports suggest they borrowed
from Singapore-based global commodities firm – Trafigura Group.

But Biti – opposition People’s Democratic Party leader -argued: “The money
would have been a major fiscal stimulus in the economy, injecting
resources needed to resuscitate collapsing industries thereby creating
much-needed employment amongst the huge pool of the jobless poor in

He said the money must have been directed to the Distressed Industries and
Marginalised Areas Fund (Dimaf), Zimbabwe Economic Trade Revival Facility
(Zetref) and other major capital projects, including rehabilitation of the
collapsing transport network.

“Repaying the very rich World Bank at a time when 3 million Zimbabweans
are receiving food aid is a shocking betrayal to the struggling masses of
Zimbabwe,” Biti said.

The payment of the money to the World Bank is in line with the October
2015 Lima plan agreed in Peru.

In terms of the plan, the international community agreed that Zimbabwe
must pay the financiers for it to be eligible for fresh funding.

“We argued then as we do now that the Lima plan is a disaster which
will not work,” Biti said.

“It is a disaster for the IFIs and the international community to engage
Zimbabwe without structural reforms.”

He said Zimbabwe must reform the wage bill which has ballooned owing to
the ghost workers “who are part of Zanu PF’s election rigging

He also called for the “rationalisation and retrenchment of the government
expenditure which is dominated by executive travel abroad and financing of
Zanu PF activities; crafting a new Mines and Minerals Act; crafting a new
diamond policy to deal with transparency, value addition and gem retention
proportions, repealing the Indigenisation Act to promote Foreign Direct
Investment and capital inflows and addressing the cash, liquidity,
currency and banking crisis crippling the economy.”

“We argued then as we do now that the Lima plan would fail as there are no
reformers in Zanu PF, it is therefore impossible to have reform without
reformers. On this call we have been thoroughly vindicated,” he said.

“On the political side, human rights violations are on a rise, Zanu PF has
re-introduced the training of its terror militias; in the past year many
activists were arrested, tortured, with some abducted and injected with an
unknown substance.”

Biti said “it would be wrong, immoral, dishonest and criminal for the
international community to engage Zimbabwe before clear evidence of an
irrevocable process towards political reform.”

“Our contention is that Zimbabwe must not be allowed to have any fresh
lines of funding without attending to both political and economic

He said by accepting such payment, the IFIs “are complicit, aiding and
abating Zanu PF’s power retention agenda”.

“We are aware that the World Bank has in the past sided with dictators,
recycling autocratic regimes on the African continent and indeed Latin
America. We appeal to the World Bank to stop these shenanigans,” he said.

Since Zanu PF took over sole custody of the economy in 2013 after the
stability-inducing inclusive government, the economy contracted by 30
percent in such a short space of time with unemployment reaching 95

At the same time, poverty levels have increased, 75 percent of Zimbabweans
are now living on less than $1,25 per day.

Recently, financial institution AfrAsia  in its latest survey classified
Zimbabwe as the poorest country on the African continent.

“We attribute this to the voodoo economics of Chinamasa,” Biti said.