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No Money Yet

SOUTHERN African Development Community (Sadc) countries will struggle to raise the US$2 billion Zimbabwe urgently needs over the next 10 days despite committing themselves to the task, regional leaders admitted during their extraordinary summit in Swaziland on Monday.

This comes amid reports that international donors are mulling an interim rescue package to be channelled through the private sector to avoid a potential tug-of-war between President Robert Mugabe and Prime Minister Morgan Tsvangirai over control of the funds.

Sources said the donors were anxious about Mugabe’s commitment to meeting the requirements of the power-sharing deal and the central bank’s role in the country’s financial affairs.

Sadc officials and diplomats who spoke to the Zimbabwe Independent at King Mswati’s Lozitha Palace where regional leaders discussed Zimbabwe’s bailout said while the leaders agreed to help their troubled neighbour, the region could not raise such sums at short notice.

Sadc approved a Zimbabwe economic recovery plan of about US$10 billion over the next two to three years. However, they agreed that US$2 billion was needed urgently to save the new inclusive government from paralysis.

But with the exception of South Africa the money simply isn’t there.

Leaders of the unity government last week admitted they would face a debilitating crisis even before their first 100 days in office are over if they did not get funding.

Sadc gave a thumbs up to the Short Term Emergency Recovery Programme (Sterp) announced by government three weeks ago and agreed that about US$10 billion would be needed to fund it. Zimbabwe had initially tabled a figure of US$8,5 billion but Sadc rounded it up to US$10 billion.

Sadc established a committee of ministers of finance comprising South Africa, Zambia, Democratic Republic of Congo, Botswana, and Zimbabwe as well as the Sadc executive secretariat to coordinate support to the Zimbabwe recovery process.

The committee was tasked to visit major capitals in Europe, Asia, and North America as well as financial institutions to mobilise support for Zimbabwe.

Sadc leaders said they would support Zimbabwe in implementing Sterp in the form of budget support, lines of credit, joint ventures and manufacturing.

Only South Africa, whose economy is at least 24 times bigger than all Sadc economies combined, appeared able to put something on the table. Pretoria immediately put forward a R500 million line of credit and R300 million in budget support to help Zimbabwe. 

Sources at the summit said the other Sadc leaders admitted they had no money.

“That is why these leaders emphasised the need to lift sanctions on Zimbabwe because they realised that was the best way to address the problem, rather than through their own contributions which they admitted would be inadequate,” an official who attended the closed session said referring to balance of payments support.

One Sadc leader told his delegation that “we committed ourselves, but we will just give the very little we can afford”.

A senior Sadc official said regional leaders had “good intentions, but lacked the capacity” to deliver on their promises.   
Zambian President Rupiah Banda admitted when he arrived home that although they wanted to help it would be difficult to raise the money.

Acknowledging Sadc has no money, Finance minister Tendai Biti told journalists at Lozitha Palace that it was not the money that mattered most, but the principle of regional solidarity with Zimbabwe’s plight.

Tsvangirai has apparently appealed to G20 leaders meeting in London to help Zimbabwe deal with the economic crisis. But they have money problems of their own.

Meanwhile, diplomatic sources in Harare told the Independent that donors wanted to channel the interim aid through banks and humanitarian organisations, thereby by-passing the fiscus.

Government sources this week said this was a potential source of conflict in the unity government as ministers were already complaining that their ministries had no funds.

“One has to understand that Zanu PF has survived this far due to fiscal support and administrative back-up from the civil service,” said a party source. “The challenge today for the party is having access to funds to run pet projects through the ministries of Youth, Women’s Affairs and SMEs.”

Most of the aid by the West, the sources said, would go towards enhancing industrial production, while humanitarian organisations would be capacitated to revive social sectors such as health. Little of this money will go to central government.

The handling of funds coming from donors is expected be discussed at the cabinet retreat starting in Victoria Falls today.

The sources said the Western countries and multilateral financial organisations have agreed to work with the inclusive government, but have set benchmarks the new administration should meet before they can release the money to revive Zimbabwe’s flagging economy.


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