Mugabe seeks $1.4billion World Bank reprieve

COLOGNE - President Robert Mugabe's administration has ratchet up efforts, to seek a massive US$1.4billion World Bank reprieve, as the country's economy is sliding back into a tailspin, The Telescope News reported.

Senior officials in government, including a cabinet minister this week confirmed that finance ministry technocrats, are working on a plan for debt relief with the Washington based Bretton Woods financial institution.

The revelations come on the backcloth of reports about the country's State Security agency, the Central Intelligence Organisation (CIO) warning Mugabe about untold national political peril, which might be ignited by worsening economic conditions, as macro-economic fundamentals continue to dislocated, with no immediate solution in sight, thus sparking fears of civil unrest and potential mayhem. A CIO report presented to Mugabe last month, recommends the Zanu PF strongman to urgently find ways to address the political crisis.

A good number of experts believe, the country's economy is on the verge of recession, with low consumer demand and a liquidity crunch putting its businesses under strain. Foreign currency revenue inflows have dwindled, while government is failing to fund critical public service programmes. Public servants have also recently not been receiving their salaries on time, with police and army officers being the worst affected.

Phil Hay, the World Bank's spokesman for Africa, told The Telescope News, that the global bank is aware of Zimbabwe's interest in earning debt relief, and that the country's total debt is around $1.4billion.

" We are aware of Zimbabwe's interest in qualifying for debt relief under the heavily-Indebted Poor Countries Initiative (HIPC)," said Hay. " A decision on eligibility would need to be taken eventually by the Boards of both the World Bank and the IMF once they assess whether Zimbabwe has met key criteria for debt relief. Our latest figures show that Zimbabwe's total debt to the World Bank is around $1.4bn, of which $1bn is in arrears."

The World Bank's HIPC Initiative, according to their website currently identifies 39 countries, most of them in Sub-Saharan Africa, as potentially eligible to receive debt relief.

Mugabe will be off to China next month, in a trip reminiscent of the one he made in 2005 to Hu Jintao in Beijing, when his regime faced a shut-down as relations with the West soured. China then, just is expected now, will seek more minerals and other trade concessions in exchange for economic rescue. Beijing is one of Zimbabwe's largest trading partners and has supplied buses, civilian and military aircraft to Mugabe as he moved to bust targeted sanctions by the European Union (EU) slapped over his government's human rights abuses.

Former finance minister, Tendai Biti, has added his voice on the economy, and called for urgent action, to avert a recession, which might last 10 years.

"It is clear that, a year after the elections, the Zimbabwe economy has entered into the realm of a ‘U' shaped recession that is likely to last for at least 10 years, unless there is courage to act differently to usher in a new discourse on the same," said Biti, who was Finance Minister during the 2009-13 Government of National Unity (GNU), in a statement on Thursday.

"The economy is in comatose, arrested by stagnation and deflation. There is continuing and deepening poverty characterised by suffering and deprivation. It is clear that Zimbabwe's growth rate in 2014 will be less than 2 percent, signifying a status quo of economic malaise characteristic of the depression years (1997-2008), a period where the economy lost 60 percent of its value…A further 40 percent of the economy is likely to be lost."

Zimbabwe has now began warming relations with both the World Bank and International Monetary Fund (IMF), after the latter had closed down their office, which only reopened this year.