The World Bank has used a special health fund to provide US$7 million to Zimbabwe to help the country fight the spread of coronavirus.
The US$7 million is made up of US$5 million from the World Bank’s Global Financing Facility Trust Fund and a further US$2 million that is being diverted from the World Bank’s Zimbabwe Idai Recovery Project.
“We recognise this is a global crisis that impacts every country and we cannot leave anyone behind,” the World Bank said, according to Bloomberg. The Bank’s existing multi-donor Zimbabwe Reconstruction Fund technical assistance program is also now focused on supporting the government’s emergency-response efforts.
The Global Financing Facility (GFF) is a special aid trust fund launched in 2015 to support public health in low-income countries. It is partly funded by governments, among them Norway, Denmark and Germany, and also by private funders such as the Bill & Melinda Gates Foundation.
The World Bank’s support for Zimbabwe’s coronavirus response has had to be granted via the GFF as the country is still not eligible for direct budgetary support through normal lending channels.
Much of the World Bank’s COVID-19 support to other African countries so far has been via the bank’s International Development Association, which provides grants and low to zero-interest loans for the world’s poorest countries.
Zimbabwe is unable to get direct credit from lenders, including the IMF, partly because it owes other international lenders. The country’s public and publicly guaranteed external debt stood at US$9.8 billion in 2019, according to IMF data.
Zimbabwe’s debts
While Zimbabwe has cleared its arrears with the IMF, the country as of 2019 still owed US$687 million to the AfDB, US$1.4 billion to the World Bank and US$322 million to the European Investment Bank. These arrears, under global lending rules, mean the country cannot qualify for new aid from any of the funds.
Should Zimbabwe clear its arrears, it would still need to overcome US measures that make it illegal for institutions such as the IMF and the World Bank to extend budgetary support or debt relief to Zimbabwe.
Econet founder Strive Masiyiwa has recently called on lenders to set up a special fund to support Zimbabwe’s COVID-19 response.
In April, Finance Minister Mthuli Ncube appealed to the IMF and other lenders for aid. As at May 4, 22 African countries had appealed for and been granted aid from the IMF’s emergency relief fund. Among these are Zimbabwe’s neighbours Zambia, Malawi and Mozambique.
