Zimbabwe’s crippled economy received a boost yesterday when the IMF sanctioned a US$510 million loan, its first to the country in a decade.
But the move stirred conflict between the partners in Zimbabwe’s unity government amid fears it would used to shore up Zimbabwean President Robert Mugabe’s regime.
Zimbabwean Reserve Bank Governor Gideon Gono said the IMF had paid it US$400 million via a fund for developing countries hit by the global recession, with a further US$110 million to follow next week.
“I can confirm that the Reserve Bank of Zimbabwe did receive the funds,” Gono told the state-owned Herald newspaper, adding that he and Zimbabwean Finance Minister Tendai Biti would discuss how to deploy the funds.
The money will be used to replenish Zimbabwe’s dwindling foreign currency reserves and has been released on condition it is not diverted to other projects.
Political leaders hailed the decision as a sign that Zimbabwe’s unity government is ending the country’s spell in the international wilderness.
The IMF wound down its program there 10 years ago and formally withdrew in 2002, adopting a “declaration of noncooperation” with the Mugabe government.
Eddie Cross, an economist and policy co-ordinator for the Movement for Democratic Change (MDC), said: “This is the first significant IMF involvement with Zimbabwe for more than a decade”
“The magnitude is very substantial, about half our total budget this year. It’s a very large contribution,” Cross said.
The MDC, however, opposed Gono’s appointment at the reserve bank and will be anxious to ensure he does not control the funds in case they are directed to the coffers of Mugabe’s Zanu-PF party instead of the impoverished population.
“Gono is part of the reactionary elements fighting the unity government,” Cross said. “He’s been the principal culprit for the meltdown of the economy. We’ve been successful in ... circumventing him and that’s what we’ll do with this money.”
“It will be controlled very carefully, otherwise it will be used and abused and find its way to all sorts of nefarious activities and corrupt institutions,” he said.
Another MDC source said: “Gono has tried to take the money but Biti is trying to take charge.”
The source added that Zimbabwe may be unable to draw down the funds until it has shown it can repay a debt of US$5.7 billion to various creditors.
“The funds will come but it will be in the context of Zimbabwe having committed to clearing these debts,” he said.
The IMF told Zimbabwe two weeks ago that it would not receive the US$510 million until it repaid arrears of US$142.2 million. G20 leaders agreed in April to treble to US$750 billion the IMF’s capacity to help struggling economies. The IMF Web site said all 186 members were eligible to receive the money from Aug. 28 in proportion to their existing quotas with the fund.
Zimbabwe has suffered a decade of economic meltdown and record hyperinflation, worsened by the withdrawal of western aid over policy differences with Mugabe’s previous administration, before he formed the unity government this year with rival, Morgan Tsvangirai.
Western donors have demanded broad political and economic reforms before giving direct aid to the government. Donors currently provide only humanitarian aid.
OPTIMISTIC: A Philippine Air Force spokeswoman said the military believed the crew were safe and were hopeful that they and the jet would be recovered A Philippine Air Force FA-50 jet and its two-person crew are missing after flying in support of ground forces fighting communist rebels in the southern Mindanao region, a military official said yesterday. Philippine Air Force spokeswoman Colonel Consuelo Castillo said the jet was flying “over land” on the way to its target area when it went missing during a “tactical night operation in support of our ground troops.” While she declined to provide mission specifics, Philippine Army spokesman Colonel Louie Dema-ala confirmed that the missing FA-50 was part of a squadron sent “to provide air support” to troops fighting communist rebels in
PROBE: Last week, Romanian prosecutors launched a criminal investigation against presidential candidate Calin Georgescu accusing him of supporting fascist groups Tens of thousands of protesters gathered in Romania’s capital on Saturday in the latest anti-government demonstration by far-right groups after a top court canceled a presidential election in the EU country last year. Protesters converged in front of the government building in Bucharest, waving Romania’s tricolor flags and chanting slogans such as “down with the government” and “thieves.” Many expressed support for Calin Georgescu, who emerged as the frontrunner in December’s canceled election, and demanded they be resumed from the second round. George Simion, the leader of the far-right Alliance for the Unity of Romanians (AUR), which organized the protest,
ECONOMIC DISTORTION? The US commerce secretary’s remarks echoed Elon Musk’s arguments that spending by the government does not create value for the economy US Secretary of Commerce Howard Lutnick on Sunday said that government spending could be separated from GDP reports, in response to questions about whether the spending cuts pushed by Elon Musk’s Department of Government Efficiency could possibly cause an economic downturn. “You know that governments historically have messed with GDP,” Lutnick said on Fox News Channel’s Sunday Morning Futures. “They count government spending as part of GDP. So I’m going to separate those two and make it transparent.” Doing so could potentially complicate or distort a fundamental measure of the US economy’s health. Government spending is traditionally included in the GDP because
Hundreds of people in rainbow colors gathered on Saturday in South Africa’s tourist magnet Cape Town to honor the world’s first openly gay imam, who was killed last month. Muhsin Hendricks, who ran a mosque for marginalized Muslims, was shot dead last month near the southern city of Gqeberha. “I was heartbroken. I think it’s sad especially how far we’ve come, considering how progressive South Africa has been,” attendee Keisha Jensen said. Led by motorcycle riders, the mostly young crowd walked through the streets of the coastal city, some waving placards emblazoned with Hendricks’s image and reading: “#JUSTICEFORMUHSIN.” No arrest
RSS