World Bank pledges support for Zimbabwe

World Bank vice president for Africa Hafez Ghanem
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THE World Bank will support Zimbabwe’s economic recovery and international debt clearance efforts, a senior official of the multilateral lender has said.

Yesterday, World Bank vice president for Africa Mr Hafez Ghanem said he was supportive of President Mnangagwa’s agenda regarding cooperation with international lenders.

Mr Ghanem made the remarks after emerging from a meeting with President Mnangagwa here, where the Zimbabwean leader is attending the 73rd Ordinary Session of the United Nations General Assembly.

In 2015, Zimbabwe adopted the Lima Plan to clear debt arrears, and President Mnangagwa’s Government has revived it as part of a broader strategy to attract fresh lines of credit and foreign direct investment (FDI).

Zimbabwe has cleared arrears to the IMF, but its owes the World Bank around $1 billion, which resulted in suspension of balance of payments (BOP) support.

Beyond that, the US sanctions law— the Zimbabwe Democracy and Economic Recovery Act — has for close to two decades restricted Zimbabwe’s access to lines of credit from multilateral lending institutions.

Zidera bars any American citizens who sit on boards of international financial institutions from authorising credit to Zimbabwe.

President Mnangagwa’s Government has set about normalisation of relations via political and business-based diplomacy, the latest effort of which was yesterday’s meeting with Mr Ghanem.

Also present in that meeting were Finance and Economic Development Minister Professor Mthuli Ncube and Reserve Bank of Zimbabwe  (RBZ) Governor Dr John Mangudya, who are part of President Mnangagwa’s delegation in the United States.

Mr Ghanem said, “We will be in contact with (Prof Ncube and Dr Mangudya) to work on that (Lima plan), and also to look at the future; how the World Bank and Zimbabwe’s co-operation can be strengthened, and we can move beyond the debt clearance.

“I came out of this meeting very optimistic about the future and the future of Zimbabwe’s economy and hope also (for) the future of co-operation between the World Bank and Zimbabwe.”

Mr Ghanem said Preisdent Mnangagwa had articulated to him how Zimbabwe was opening up for business, its economic growth objectives and how it was improving the social sectors.

“It was an excellent opportunity for me to meet His Excellency the President to discuss Zimbabwe’s economic programme and the partnership between Zimbabwe and the World Bank,” he said.

On Monday, President Mnangagwa all but secured the support of Britain – through its Minister of State for Africa Harriet Baldwin – in its quest for backing for the Lima Plan at next month’s annual meetings of the IMF and World Bank in Bali, Indonesia.

Implementation of the Lima Plan entails economic reforms that include reducing the fiscal deficit, stabilising the monetary system and resolving arrears for access to development financing.

Zimbabwe is also required to reform its public sector and reduce the high wage bill, which accounts for as much as 90 percent of the National Budget.

To this end, President Mnangagwa has informed Zimbabweans to prepare for belt-tightening, assuring them that the temporary crunch is worth the objective of creating a middle-income economy by 2030.