THE United Kingdom has suspended the Â£1 billion (US$2 billion) a year international emergency aid and development package it had set aside for Zimbabwe until the outcome of the presidential results is announced.
Businessdigest understands that discussions around the rescue package which had been supposed to take place at the spring meetings at the International Monetary Fund (IMF) last week did not take place as originally scheduled.
Sources said the discussions were slated pending the outcome of the presidential elections and were removed from the agenda of the IMF meetings held on April 12 and 13.
â€œThere was some last minute manouvring but eventually the issue was removed from the agenda,â€ said one source.
â€œHowever, the UK has always been clear as to where it stands on the issue of the current government, particularly on issues to do with corruption and abuse of state funds, so there will be no funding as long as they remain in office.â€
The British embassy in Zimbabwe could not confirm the developments.
However, First Secretary for Political, Press and Public Affairs, Keith Scott said the UK was still prepared to respond to the dynamics in Zimbabwe but refused to go into detail.
â€œWe stand ready to respond to the changing circumstances facing Zimbabwe, but this is not the time to go into detail of recovery packages,â€ Scott said.
Scott said the UK was still holding consultations with the World Bank on economic support for Zimbabweâ€™s recovery.
â€œThe United Kingdom is readyÂ forÂ both positive change in Zimbabwe and continued decline.
We are working with the World Bank and other donors in preparing to support recovery as soon as positive political change comes,â€ he said.
Under the initial arrangement, the rescue package would have been coordinated by the IMF, World Bank, the European Union and the United Nations.
The issue would have been discussed this week at the EU general affairs council.
The UK was also pushing for the package to be discussed on the sidelines of the North Atlantic Treaty OrganisationÂ summit in Bucharest.
It had been drafted along the lines of rescue packages prepared by the IMF and Sadc in 1999 and last year respectively.
The packages were rejected by President Robert Mugabe who claimed that the conditions attached to the packages would result in the â€œre-colonisationâ€ of Zimbabwe.
Acting director of the IMF African department, Benedicte Christensen revealed after the spring meetings that the IMFâ€™s major concern was finding immediate solutions to halting the countryâ€™s hyperinflation.
Christensen alluded to the harmful effects of the Reserve Bank of Zimbabweâ€™s quasi-fiscal activities sustained through the printing of money and unsustainable increases in money supply.
â€œAs we have said earlier in our reports on Zimbabwe, we need to immediately stop hyper-inflationâ€¦We do not have any one way of dealing with Zimbabwe. I think the core issue is to stop the money press, in part by getting the fiscal situation under control,â€ she said.
By Kuda ChikwandaÂ