The World Bank Group is set to partner with six donors to contribute more than $100 million to the Zimbabwe Reconstruction Fund (ZIMREF) next year, a surprising turn of events geared towards a rapprochement following years of intense disagreements. The six donors include the European Union, United Kingdom, Germany, Norway, Denmark and Sweden.
Revealing this development, World Bank Country Director for Zimbabwe, Malawi and Zambia, Ms Kundhavi Kadiresan, said ZIMREF will expand the bank’s support to include investment projects and channel some financing directly through Government systems. This, in turn, allows the flexibility to facilitate some of the pressing reforms in the area of parastatals by carrying out a thorough due diligence audit over management systems.
Patrick Chinamasa, Finance and Economic Development Minister, providing more insight on how the funds will be utilized said, “Under ZIMREF there is going to be $15 million to be made readily available next year. It is giving me the discretion to use the money to carry out these audits. We will start naturally with the strategic ones. The audit is not just with respect to parastatals but also with respect to local authorities because between them the State enterprises and the local authorities are a pain and an albatross around the neck of the fiscus,” he said.
Mr Chinamasa also said that the Government will, over the next couple of months, start “a conversation” with the World Bank on Zimbabwe’s arrears to the financial institution. The Government had taken a fundamental step in facilitating this renewed relationship by increasing its payments to the bank according to current fiscal capacity, this was a feature in this year’s National Budget.
The bank is expected to help explore options that can accelerate the resolution of the debt owed by Zimbabwe without compromising efforts to reduce poverty. “Over the last few months, the World Bank and the Government of Zimbabwe have renewed efforts toward finding a resolution of the outstanding arrears to the bank. The World Bank will also support the Government’s efforts to design a Zim-Asset programme of economic policies and institutional reforms that will boost inclusive growth and accelerate poverty reduction,” said Ms Kadiresan.
Early this month the World Bank Executive Board approved the Kariba Dam rehabilitation project and financed its development with about $75 million from the International Development Association, co-financing of $25 million was acquired from the Government of Sweden. In addition, the African Development Bank (AfDB) will contribute $75 million and the European Union will pump in $100 million, thus bringing the entire financing package to $300 million.
Agreeing to finance the Kariba project is another indicator of a renewed relationship between Zimbabwe and the World Bank as the dam is situated just between Zambia and Zimbabwe.
By Emmanuel Iruobe
