African Development Bank President Donald Kaberuka praised the measures taken by Zimbabwe toward economic recovery Thursday and urged international support for the plan. Zimbabwe is said to require around $5 billion worth of foreign aid to recover from the world's worst hyperinflation, fZimbabwean Prime Minister Morgan Tsvangirai’s policy of paying workers
with foreign currency has been criticized by Robert Mugabe
Zimbabwe has made an impressive start on an economic recovery plan
which warrants support from the international community, African
Development Bank President Donald Kaberuka said on Thursday.
He told reporters on the sidelines of a summit of southern African
finance ministers in Cape Town that the AfDB was prepared to set up a
donor meeting for Zimbabwe, but its $5 billion foreign debt needed to
be cleared to secure more aid.
"It will require that Zimbabwe comes forward with a credible economic
programme. Now the first steps I have seen, listening to (Zimbabwean
Finance) Minister Tendai Biti, is quite impressive and it merits
support," Kaberuka said.
The new administration urgently needs to tackle an economic meltdown
that has led to the world’s worst hyperinflation, food shortages and a
cholera epidemic.
Prime Minister Morgan Tsvangirai said last week it would cost as much as $5 billion to repair the economy.
Zimbabwe’s new power-sharing government will be heavily dependent on
foreign aid and investment to ease the decade-old economic crisis.
But Western donors have made it clear money will pour in only when a
democratic government is created and bold economic reforms implemented.
VICIOUS CIRCLE
Kaberuka called on Zimbabwe to meet its external debt to the Paris Club
of government lenders, international finance institutions and other
creditors to secure more financial help.
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"Now that can done fairly quickly. It’s complex but it’s not undoable," Kaberuka said.
John Robertson, a leading private economic consultant in Harare, said
donors should take charge and drive policy reforms and then base aid
flows on government compliance.
"It’s some kind of vicious circle. The economy is in doldrums and
cannot contribute to any debt repayments until it gets off the ground,
and it cannot get off the ground without some massive outside help," he
said.
"You have to get the economy on a programme to produce again before you
can get Zimbabwe out of the woods. It’s going to be hard, and the
government has to pass the credibility test."
Mugabe, blamed by critics for the collapse of the once-promising
economy, expressed doubts over Tsvangirai’s policy of paying civil
servants in foreign currency, instead of inflation-ravaged Zimbabwean
dollars, under the recovery plan.
"When it was first mooted, the idea of paying people in U.S. dollars, I
was against it and I still am because we just do not have enough
(foreign currency), said Mugabe.
"It is a problem that confronts us even now."
The veteran leader’s comments, part of an interview with state
television to be broadcast on Thursday, were carried by the state-run
Herald newspaper.
Economic woes have been worsened by the suspension of international
aid, mainly over policy differences with Mugabe, in power since
independence from Britain in 1980.