Sadc Heads to Meet on Zim Aid Package

SADC heads of state and government will meet on Monday in Swaziland to consider a US$2 billion economic aid package to Zimbabwe, amid desperate calls from the inclusive government to international donors to bankroll its economic recovery programme.

The inclusive government said without an immediate rescue package from international and regional donors, the administration would fail to deliver leading to an escalation in the current humanitarian crisis.

Most of the donors have remained sceptical about President Robert Mugabe’s commitment to change and have withheld the much–needed funds to kick start the country’s economy.

Western donors are not willing to bankroll the new government because a number of issues which they said needed urgent attention –– the freeing of the media, observance of property rights and the rule of law.

Prime Minister Morgan Tsvangirai, Finance minister Tendai Biti and Foreign Affairs minister Simbarashe Mumbengegwi last month approached South Africa seeking US$5 billion for economic revival.

This led to the convening of a Sadc Council of Ministers meeting in South Africa which came up with a US$2 billion package that must be ratified by the regional bloc’s heads of state.

Monday’s summit would be preceded by a meeting on Sunday of the Council of Ministers to be chaired by South African Foreign minister Nkosazana Dlamini Zuma, to process reports to be considered by the summit.
The Council of Ministers will present a report on the Zimbabwe economic recovery plan to the Sadc heads of state for approval by the summit.

It is hoped that this would lead to South Africa opening a credit line to help Zimbabwe rebuild its shattered economy after years of political crisis.

In his maiden speech in parliament on Wednesday, Deputy Prime Minister Arthur Mutambara said countries like Britain and the United States should remove sanctions against Zimbabwe for it to access balance of payments support.

Mutambara said: “Here is our message to the international community. Hear us on this one — Americans, British or whoever you are — we are determined to make this agreement work. It is irreversible. Please do not give us conditions like we are waiting for signs . . . if we do not get balance of payments support this government will collapse and the people will be the victims.

“Surely, surely, we are saying, remove any type of sanctions you have imposed. When you impose sanctions, you impose them on Cde Tsvangirai. You undermine the efforts of the Prime Minister. It is not for the Americans or British to judge us.”

The same day, Biti told the visiting Norwegian Environment and International Development Minister Erik Solheim that the international community should remove benchmarks for aid to be offered to Zimbabwe as the new government was still in its infancy.

“We need some breathing space so that we deal with mandate issues. The international community should not put walls through these benchmarks,” Biti said.

But online news agencies quoted a Western diplomat in Harare saying the international community was willing to have dialogue with Zimbabwe for purposes of setting conditions for re-engagement.

Swedish Ambassador to Zimbabwe Sten Rylander reportedly said: “We are willing, together with the rest of the international community, to have dialogue with the Zimbabwean government and to agree on mutual benchmarks to assist Zimbabwe on the path of recovery.”

The inclusive government, looking for US$2 billion from the region and at least US$5 billion for economic recovery, desperately needs US$1 billion over and above its fiscal budgetary requirements to meet an array of emergency financial obligations.

Failure to secure the US$1 billion could cripple the operations of the new government that has raised public expectations on economic recovery and delivery of services, making its first 100 days a barren stretch.

The Zimbabwe Independent two weeks ago reported that a confidential internal government memo circulated to selected ministries says US$1 billion is needed now to meet emergency obligations which include critical payments for fuel, electricity, water, grain, seed, fertiliser, lines of credit, diplomatic missions, parastatals, currency printing equipment, the Registrar-General’s office, presidential scholarships, security ministries, loans and debts.

The memo says as of last month, Zimbabwe had outstanding obligations of US$222 million to Equatorial Guinea  for fuel, Noczim US$26,5 million, Noczim-pipeline US$4 million, lines of credit US$195,4 million, GMB US$106,05 million, corporate loans US$240,74 million, diplomatic missions US$30 million, fertilisers US$35,6 million, army/intelligence/police US$20 million, Air Zimbabwe US$10 million, Zinwa US$5 million, China US$5 million, the Registrar-General US$5 million, presidential scholarships US$4 million, Zesa US$40 million, seed US$12 million and currency printing US$100 million.

“This amounts to US$1 061,29 billion. Government needs to swiftly raise this money to keep running,” the memo says. “Failure to pay some of these obligations urgently would further weaken the country’s credit rating in regional and international markets.”

The memo says government is facing a serious financial crisis and would need to move with speed to raise funds to save the situation. The crisis is aggravated by a total stock of external debt of over US$5 billion.

BY PAUL NYAKAZEYA

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