Zimbabwe’s debt position is hampering Cyclone Idai financial support mobilisation, a situation which may see the country’s recovery efforts lagging behind its equally affected regional counterparts, the World Bank (WB) has said.
Speaking to NewZimbabwe.com on the sidelines of the Launch of the Zimbabwe IDAI Recovery Project and Resilience Project on Monday, WB regional director, Ede Jorge Ijjasz-Vasquez said that exploring ways to support Zimbabwe was a challenge due to the obtaining arrears position.
“The World Bank is not allowed to extend any assistance to countries that are still owing financiers; so we had to find another way to assist Zimbabwe and after sitting down, we discovered that we could use the Crisis Response Window through which US$72 million was mobilised,” he said.
He noted that if Zimbabwe was not in arrears, it was going to be easy for the country to access other financing instruments which may have reduced interest rates.
Asked on why the money being allocated came through United Nations agencies as opposed to a situation whereby the funds are channelled through the government agencies like what happened in other Cyclone Idal countries, the World Bank official said such situation was caused by the debt position.
“This is a result of Zimbabwe’s debt position because we are not allowed to transmit any funds to countries that are still owing,” he said.
Last year, Finance Minister, Mthuli Ncube committed to clearing Zimbabwe’s US$2 billion arrears with the World Bank and African Development Bank within 12 months, after securing the support of international creditors and donor countries.
Zimbabwe has struggled to access international credit since defaulting on its debts to global lenders two decades ago and running up arrears of nearly $6 billion.
The country is battling to recover from the devastating effects of Cyclone IdaI which also struck other regional neighbours causing extensive damage worth an estimated US$622 million.
Atleast 50,000 households were also destroyed, directly affecting 270 000 people including 60 000 displaced.
The recently launched recovery projects by the government of Zimbabwe, African Development Bank (AfDB), the World Bank and the United Nations Office for Project Services is to support the communities affected by Cyclone Idai.
WB is providing a US$72 million grant to fund the recovery project which will provide immediate support for the most affected communities across nine districts while the African Development Bank is funding the $24.5 million project that will help restore essential services including transport, electricity, water and sanitation to the most severely affected districts of Chimanimani and Chipinge.