The European Union (EU) Ambassador to Zimbabwe, Philippe Van Damme has said that Zimbabwe will not receive any new significant funding, until it holds free and fair credible elections.
In an article in the State media, Van Damme was addressing the issue of whether the new dispensation of President Emmerson Mnangagwa will lead to new money.
Said Van Damme:
The question which most people are asking is: Will this new dispensation lead to new money?
The truth is that in the short-term, we may mobilise funds mainly in relation to the electoral process and related areas such as constitutional alignment, judicial issues, reforms.
However, there will not be significant new funding coming in until you have credible elections.
If elections are credible and Government engages international financial institutions such as the IMF and World Bank, manages to clear arrears and agrees on an extended credit facility with the IMF, then we may consider additional funding to accompany that reform process.
Part of the money that may come in future may come through the African Union-EU agreement; that is of 4,4 billion euro.
That money will have a multiplier effect and lead to blending initiatives for infrastructure in Africa, lead to risk reduction and investment.
The public sector cannot access these funds before agreeing on the reform package.
…However, to unlock full potential from all initiatives, Zimbabwe must take a major step by conducting credible elections and engaging IFIs to clear arrears.
The EU was the main co-funder of the Kariba rehabilitation programme, which was a 300 million euro programme.
Zimbabwe has a complex structure so we had to support the programme through Zambia.
This is why we are urging Government to clear arrears as soon as possible so that in future, your country can benefit more.
Currently, your country has cleared arrears with the IMF, but the pari-passu rule requires that you clear your arrears with the World Bank and African Development Bank.
So, it is important that arrears are cleared with all multi-lateral lending institutions because the next step is unlocking multi-lateral funding.
And then you can move to the next stage, which is the Paris Club.
To unlock bilateral funding, Zimbabwe will have to secure a debt-restricting agreement with the Paris Club.