Published by the government of Zimbabwe
13 May 2008
Harare — ZIMBABWE last month cleared US$700 million of its US$726,9 million debt to the African Development Bank (AfDB) despite the current economic challenges, the bank has said, while hailing the Government's commitment to honouring its international financial obligations.
The AfDB also acknowledged that Zimbabwe was under debilitating sanctions, contrary to Western claims that the United States, the European Union and their allies had only placed restrictions on a few individuals and not an economic blockade on the whole country.
A statement on the AfDB's website said: "On April 14, 2008, the country paid US$500 million to the African Development Bank and US$150 million to the African Development Fund. Zimbabwe has, in all, paid US$700 million to the Bank Group despite numerous economic challenges currently facing the country, both globally and locally."
The bank did not state when the other US$50 million was repaid.
Though the statement did not say how much Zimbabwe owed the bank in total, reliable Ministry of Finance sources in Harare said the total arrears to December 2007 stood at US$726,9 million.
The bank said the country's economic downturn could be attributed to the imposition of Western sanctions, among other factors, but hailed Government's resilience and determination to honour its international financial obligations.
"The absence of balance of payments support, declining capital inflows, recurrent droughts and rising oil prices have severely undermined the economy's productive capacity, resulting in most industries operating below 30 percent capacity.
"Though the country is currently experiencing balance of payments constraints resulting in delays and, sometimes, failure in meeting its financial obligations vis-à-vis donors, the Government, however, fully acknowledges its external financial obligations.
"The Government remains committed to honouring its debt obligations. In line with its commitment to fruitfully engage its partners, goodwill payments are being made with a view to normalising relations and paving the way for new disbursements.
"The Government also remains committed to instituting macro-economic reforms aimed at addressing its economic challenges. It is focused on enhancing food security, foreign exchange generation and increasing the supply of basic commodities," the statement said.
The AfDB commended Government initiatives aimed at ensuring the viability of the productive and service sectors that would lead to the revitalisation of infrastructure, agricultural productivity and increased industrial capacity utilisation.
In this regard, the institution gave the thumbs-up to the agricultural mechanisation programme being steered by the Ministry of Agricultural Engineering, Mechanisation and Irrigation and the Reserve Bank of Zimbabwe.
"The Government, therefore, continues to monitor and develop the sector through the provision of agricultural equipment and implements. To date, the Government has launched three phases of the mechanisation programme with the fourth set to be unveiled in July 2008.
"It is also rehabilitating the country's irrigation infrastructure with a view to optimising the usage of inland water bodies. It is also contemplating the building of more irrigation schemes in areas that have inland water bodies and reservoirs.
"The Government is also providing concessionary finance schemes geared towards enhancing the production of strategic food crops to guarantee food security.
"In this regard, in collaboration with development partners such as the AfDB that are financing agriculture in the country, the Zimbabwean Government will continue to ensure that the sector regains its status and plays a pivotal role in the country's economic development," the statement said.
The 43rd annual meeting of the Board of Governors of the AfDB and the 34th meeting of the Board of Governors of the African Development Fund will be held in Maputo, Mozambique, from tomorrow until Thursday under the theme: "Urbanisation, Growth and Poverty in Africa".
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MATTER OF FACT: THE HERALD STORY OF 13 MAY, 2008 TITLED “ZIMBABWE DEFIES ODDS, PAYS US$700 M TO AfDB DEBT” REFERS
1. As Monetary Authorities, our professional integrity and ethics have impelled that we comment on the recent article of The Herald which suggested that Zimbabwe paid US$700 million to the African Development Bank (AfDB).
2. Whilst the article made nostalgic good reading, as the country’s Central Bank and custodian of Government’s foreign exchange receipts and payments, we wish to categorically state that to our knowledge, there has not been any such payment.
3. Indeed, back in 2004/2005 Zimbabwe made a surprise payment to the International Monetary Fund (IMF), which experience risks making the public believe the recent unfounded newspaper article alleging Zimbabwe’s payments to the AfDB this time around.
4. If the country had such resources (US$700 million), the Reserve Bank would have prioritized the importation of grain (maize and wheat); the importation of fuel, electricity, medical drugs, industrial chemicals, fertilizers, seeds, water treatment chemicals, agricultural equipment, and other infrastructural development essentials, and of course leaving some for debt service.
5. Although as a Central Bank we are closely working with the Ministry of Finance with several rods in the fire to raise foreign exchange resources to support the economy, such efforts have not as yet resulted in multilateral or bilateral creditors and/or donors disbursing funds or taking over our debts.
6. To this end, therefore, we are making efforts to trace and verify the source and authenticity of the Herald story, in the interest of setting the record straight.
7. Until facts are established on where this article came from, we would like to advise the Nation, and our cooperating regional and international partners to treat this story with caution.
Thank you.
________________________ DR. G. GONO GOVERNOR
It's a bit embarassing but the Governor of the central bank has publicly had to admit that Zimbabwe doesn't actually have a pot to Pi$$ in. I can imagine the phone calls he got when people thought he had spent $700 million when they could have had it in their numbered swiss bank acounts, too funny!
get the facts right!!!! 650 thousand dollars is not 7 million, try some decent mathematics and stop distorting the truth. look at the adb website.
Geez thats terrible and irresponsible reporting. Where do they find these people. With people like this around, no wonder the country is in the sh!t!
The afdc website states "In a bid to actively reconnect with international donors, the Zimbabwean government last month paid part of its arrears to the African Development Bank (AfDB) Group. On April 14, 2008, the country paid US$ 500,000 to the African Development Bank and US$150,000 to the African Development Fund. Zimbabwe has, in all, paid US$ 650,000 to the Bank Group despite numerous economic challenges currently facing the country, both globally and locally. According to Mr. Abdirrahmene Beileh, AfDB acting Director in charge of Southern African countries, "Zimbabwe is still owing the Bank large amounts of money in arrears".
Where did this money come from? How is it that the government can't afford to hold a run-off election, or import fuel, but can pay back this loan? This is highly suspicious!