Zim ruled out of World Bank aid scheme

via Zim ruled out of World Bank aid scheme | SW Radio Africa by Nomalanga Moyo  January 6, 2014

The World Bank has become the latest institution to pour cold water on Zimbabwe’s bid to access fresh loans from international lenders, unless the country first clears its arrears.

Zimbabwe’s external debt runs into billions of dollars and, last year, the country formally approached the World Bank for debt relief under the ‘Highly Indebted Poor Countries’ (HIPC) scheme.

However, the world body has since indicated that the country does not qualify and will need a comprehensive arrears clearance framework with the international community to qualify for fresh loans or further financial assistance.

“Zimbabwe’s eligibility to receive assistance under the HIPC Initiative remains unclear,” the World Bank said in its latest report.

“Country could potentially be eligible for assistance if it meets end-2004 and end-2010 indebtedness criteria and if it clears its arrears to the (IMF’s) Poverty Reduction and Growth Trust,” the report further stated.

Tim Jones, policy manager at global lobby group Jubilee Debt Campaign said Zimbabwe is not automatically eligible for the ‘poor countries initiative’.

“So a political decision has to be made over issues to do with the indebtedness criteria statistics has to be made for it to be considered for the scheme.

“There have been indications in the past from the World Bank and western governments that they will be willing to let Zimbabwe in but that was very much linked to political changes in the country,” Jones said.

Jones added: “Following the July election result, it’s hard to tell what’s going to happen in future although we know that the ZANU PF government never wanted to go the highly-indebted poor countries route.”

The World Bank funds humanitarian programmes in the country, particularly in the health sector.

Zimbabwe owes the IMF and the World Bank $124 million and $1 billion respectively.

In 2012, the IMF put Zimbabwe’s external debt at $12.5 billion, with $6.7 billion in arrears.

Last year, former finance minister Tendai Biti signed up to IMF-monitored reforms in a bid to stabilise the economy and facilitate access to cheap multilateral finance.

“Going forward, sustaining high growth will require determined efforts at economic reform,” IMF chief Christine Lagarde said at the launch of the IMF scheme.

“In this regard, the (IMF scheme) already envisages important reforms in public financial management, financial sector regulation, and other areas,” Lagarde said.

But since ZANU PF took over from the coalition government, its commitment to the terms of this informal agreement has been questioned, with the IMF recently expressing concerns about the ballooning public sector wage bill. See here.

Almost six months since the regime came into power there are no signs of a clearly defined economic direction with the country experiencing a serious liquidity crunch, job losses, company closures and threats of industrial action from a disenchanted civil service.

On Monday, the Daily News quoted asset management firm TFS as saying the absence of policy direction was affecting the performance of the country’s stock exchange, which has so far recorded losses since it re-opened this year.

“The absence of concrete short-term measures to stimulate economic activity from the recently published 2014 National Budget also supports our view that the local market will continue to trade sideways,” the firm said.

COMMENTS

WORDPRESS: 9
  • comment-avatar

    Today the imf world Bank chief lagarde was in nairobi heaping praise on East African economies. No zim visit. Mugabeland will continue to be ignored until the mugarbage muggersboy cabal thrown onto the rubbish heap. Obviously. What a stupid ignorant gullible 1980 electorate. Pathetic.

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    Bad luck boys back to looking East again, good luck with that! Can’t be too many rabbits left in the hat?!

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    Doris 8 years ago

    With a potential of repaying this loan with diamonds, but not doing so through rampant corruption, is anyone surprised that the world Bank have pulled the plug. It’s high time that a “name and shame” policy was implemented. Zimbabweans have a right to know what is going on.

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    Sekuru Mapenga 8 years ago

    too corrupt.

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    munzwa 8 years ago

    not surprised!! the name and shame idea is worth pursuing…

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    What can we expect. We are a nation of greed and thievery. Corruption has become our first name. Our government rules by a lie that it won the last elections and we expect God to bless this evil. He will close the doors to ZPF’s economy until they repent and until we repent. He does not work in the dark and only the truth will set us free. No repentance! No restoration!

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    Mdidi 8 years ago

    Yah Neh amashona are a burden in this country.

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    Someone said Muchechetere the director of Zanupf’s broadcasting cooperation gets more than the IMF Chief, Lagarde. She gets something like 30000. While the Zanupf and Gushungo loyalist takes home 40000. As for Cuthbert Dube, he gets 6 times more than her since he is at 190000 at least. She is not likely to approve any loan that is going to benefit individuals because these 2 lead organizations that are linked to the government. And all the luxurious cars of the police chefs, the spacious lives of the looting Ministers such as Mdudla Obert Mpofu. Rumour is rife that even the elephant poisoning that shocked the whole world was in fact masterminded by Zanupf ministers and has its headquarters in Mutare and not even Bulawayo. How does an international organization loan a country whose reputation is just but terrible? Corruption at its worst! And then our political image that gives no hope since we really we do not CARE! Not at all about anything. We account to nobody as long as Gushungo and amai Grace Mugabe are happy with what we do or tell people its fine. Those who give loans want to deal with people who have got hearts that care.

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    William Doctor 8 years ago

    Ha ha ha – who’s laughing now comrades!