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Zimbabwe: Questions As Govt Pays Sh43 Billion to Settle Bank Debt
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The Nation (Nairobi)
14 May 2008
Posted to the web 15 May 2008
Kitsepile Nyathi
Nairobi
Editors Note: The African Development Bank stated in a press release issued today, "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".
The original story from the Nation follows:
Mystery surrounds Zimbabwe's surprise $700 million (Sh43 billion) loan repayment to the African Development Bank at a time when President Robert Mugabe's government says it cannot organise a presidential election run-off within the stipulated period because it is broke.
The pan African bank announced that the country whose economy is caving in under the weight of economic sanctions imposed by Western countries had reduced its arrears to $250 million following the big payment.
But the state-run Zimbabwe Electoral Commission (ZEC) says it is waiting for the government to allocate it $60 million before it announces the date of the presidential election run-off between Mr Mugabe and Movement for Democratic Change (MDC) leader, Mr Morgan Tsvangirai.
The announcement made ahead of the AFBD's meeting in Mozambique on Monday seems to have caught the Zimbabwean authorities flat footed and observers said efforts were now under way to limit the damage caused by the story.
In an interview with news agencies in Maputo, Finance Minister, Dr Samuel Mumbengegwi confirmed the payment but refused to reveal the source of the funds.
The story made headlines in the government controlled media on Tuesday only for the central bank governor in Harare, Dr Gideon Gono to deny that such payments had been made.
Dr Gono is said to be part of a "a junta" that has sidelined Mr Mugabe and most of his lieutenants in the ruling Zanu PF party in the day to day running of the country since their dramatic defeat in the March 29 elections by the opposition.
"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," he said in statement carried by the state media on Wednesday
Had such resources
"If the country had such resources ($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." The second round of voting should be held by May 23, 21 days after the presidential election results were announced.
Mr Mugabe (84), seeking a sixth term in office lost to Mr Tsvangirai in the first round of voting sparking an orgy of political violence blamed on his supporters.
The United Nations said the political impasse caused by the uncertainty over the run-off was fast edging towards a full blown crisis. The UN said there was an upsurge in politically motivated violence mainly targeted at opposition supporters with reports that more than 30 have been killed so far.
More than 900 are being treated in hospitals across the country while 3,000 have been displaced by the violence.
The ZEC has hinted that the runoff might not be held within the next six months because of the financial problems.
Dr Gono himself called for a transitional government of national unity while the country waited for the commission to put its house in order.
In 2005, Zimbabwe made a surprise $150 million payment to the International Monetary Fund (IMF) and there was speculation that the government had mortgaged the country's mineral resources to starve off a decision to expel it from the international lender.
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Added Dr Gono; "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.
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