IMF, World Bank keen to bail out Zim - Gaolathe

WANETSHA MOSINYI
Staff Writer | Friday May 8, 2009 00:00

 

'One of the major constraints is that Zimbabwe is in arrears with institutions,' the Minister of Finance and Development Planning, Baledzi Gaolathe, said in an interview on Monday.

'So there are questions of how this risk will be dealt with.'

Gaolathe was recently in Washington attending marathon meetings with the multilateral banks' officials, among them, as part of a Ministerial Committee of SADC Finance Ministers which is tasked with coordinating support for Zimbabwe's recovery efforts.

He said the 'talks were positive' because they (ministerial committee) made it clear to the World Bank and IMF that it was important that measures taken by Zimbabwe to revive its economy needed to be supported. The World Bank, Gaolathe said, was however willing to assist Harare through windows like the Humanitarian and Social facilities whilst the arrears issue was resolved.

'It looks like the World Bank will be faster than the IMF.  The amounts (funds) involved will not be as big as compared to the regular lending after they meet other conditions.'  

Botswana has extended a P500 million line of credit to Zimbabwe under the Short-Term Emergency Recovery Programme (STERP) and claims the lump sum is loans financed through local banks rather than directly from government coffers.

Three weeks ago, government sent an 11-member delegation on a fact-finding mission to Harare to consult and explore possible areas of assistance with their Zimbabwean counterparts.

The mission consisted of government officials, BDC, BEDIA and BOCCIM representatives.

Gaolathe said government was looking at assisting Zimbabwe in industries of 'mutual benefit' like the steel, pharmaceuticals, agriculture, and manufacturing.

The SADC Extraordinary Summit in Swaziland two months ago resolved that member states should assist Zimbabwe to implement her STERP in the form of budget support, lines of credit, joint ventures and toll manufacturing. Zimbabwe's unity government is targeting $1 billion in credit lines from Africa. Last Thursday, Zimbabwe's finance minister Tendai Biti said his country was receiving $400 million in credit lines from African states to revive its ailing industries, the first major financial package since the coalition government was formed.

Although funds from African countries may help, Zimbabwe is in dire need of aid from Western donors, who have demanded broad economic and political reforms, including ending a new wave of farm invasions aimed at the few remaining white farmers.