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PROGRESS in restoring investor confidence will be crucial to Zimbabwe’s sustained economic recovery, the World Bank President has said.
Robert Zoellick, the WB chief who was speaking from Addis Ababa, Ethiopia, during a video conference that linked 20 African countries, said Zimbabwe’s economic reforms to date — including use of multiple foreign currencies, cash budgets, and liberalised foreign exchange markets — have helped reverse the economic decline.
He said Zimbabwe was not being treated differently say from Ghana or Uganda, adding: “Zimbabwe has a substantial arrears to the World Bank which has prevented the World Bank from providing the same type and level of support it has to Ghana and Uganda.
“However, the Bank is providing limited financial support through special grant financing and substantial advisory and technical support, with support inter alia from the Analytical Multi-donor Trust Fund, administered by the Bank.”
What helps, he said was that Zimbabwe has better-growing neighbours. “So in the case of Zimbabwe, we help manage a Multi-Donor Trust Fund that has tried to provide technical assistance for the new government to understand some of the challenges that they’re going to need to take on both with the macro-economic issues, but also some of the structural dimensions.
“We had always kept some funding through some NGOs for some basic health purposes. Obviously there’s still issues there, as you know better than I do, about how the unity government can co-operate, some challenges with the central bank. Now one other issue we’d have to deal with Zimbabwe, is that there’s been large arrears built up, in other words, the debts from the past, and these would have to get cleared up and we have a procedure to work with donors to do that, but that depends on the donors' sense of whether the government in Zimbabwe is making the right progress.
“But we would like to work with regional partners, assuming that the government stays on the path and creates an opportunity for true unity, overcomes some of the problems of its past. So we’re trying to position ourselves to work closely with the African Development Bank to be able to support that process.”
Zoellick, who in the Ethiopian capital for the just-ended African Union summit, said relations with Harare have been “good” with constructive dialogue on a range of economic and project issues, including discussions of special grant support in the water and agriculture sectors.
He said infrastructure rehabilitation was crucial to rebuilding Zimbabwe’s economy and human services, adding that once the arrears to the Bank are cleared the Bank would be able to resume International Development Assistance (IDA) support for infrastructure and other investments. “There is also a possibility of some support before the arrears are cleared through a ‘Pre-Arrears Clearance Grant’ once economic reform is on a sustained track.”
BY OUR STAFF
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