Southern Africa
16 September 2009
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| Zimbabwean Finance Minister Tendai Biti (file photo) |
Earlier this month, Central Bank Governor Gideon Gono made a statement through the partisan public media saying Zimbabwe had been awarded $500 million from the International Monetary Fund.
The IMF said the money, in the form of special drawing rights that have to be sold to turn it into cash, was allocated to Zimbabwe and 185 other IMF countries in a one-time loan to help them cope with the world recession.
Finance Minister Tendai Biti says he is in close contact continuously with the IMF, and after consultations has decided that as bilateral aid is not forthcoming, he will use the IMF money to rebuild schools, hospitals, roads, railways and communications.
Since becoming the unity government finance minister, Biti has eliminated the Zimbabwe dollar and introduced U.S. dollars and the South African rand to stabilize the economy.
In an interview in a weekly newsletter published by the unity government's prime minister, Morgan Tsvangirai, Biti hinted at tension between himself and Gono. In a clear reference to the financial chaos of the previous ZANU-PF administration he said Zimbabwe's era of what he called 'Zombie' economics were over, as was the "era of of the state acting as the arena for personal enrichment."
He described the previous administration as a "kleptocracy" and said he would ensure the IMF's once-time award was used for the benefit of the people as a whole and not individuals.
Gono, who has been widely accused of usurping the finance ministry's powers before the inclusive government was sworn into power in February, was responsible for the printing of large amounts of money and triggering the record-breaking inflation that crippled the economy last year.
In his interview Finance Minister Biti painted a grim picture of the Zimbabwe economy, saying it has a debt of $5 billion, of which the central bank debt is $1 billion.
He said the national debt, inherited by the inclusive government, as a percentage of gross domestic product was more than 150 percent and that this debt was two-and-one-half times greater than the value of Zimbabwe's total exports. He said Zimbabwe's indebtedness, including current arrears, which he said were a result of previous economic mismanagement, prevented Zimbabwe from accessing cheap loans from institutions like the World Bank.
Western countries have said they will only provide development aid when the year-old political agreement signed by Mr. Mugabe and Mr. Tsvangirai is fully implemented.
Zimbabwe has received more than a $1-billion in humanitarian aid since the economic crisis began in earnest in 2000.
The IMF says another $10 million was awarded to Zimbabwe, but is being held back until it clears $140 million in current arrears to the fund.