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Why Zimbabwe didn’t get IMF Covid-19 debt relief

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Zimbabwe has been sidelined by the IMF from debt relief availed by the international lender to cushion against Covid-19 virus.

The International Monetary Fund (IMF) has announced half a billion United States dollar debt service relief fund for the world’s poorest and vulnerable economies to help them fight and contain the spread of the Covid-19 pandemic.

Twenty-five affected countries, including several African countries, have been selected to benefit from the debt relief package. However, Zimbabwe is not among economies that have been earmarked as beneficiaries; all because of a technical condition one must meet to qualify.

The countries that will receive debt service relief are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, DRC, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

Finance and Economic Development Minister Professor Mthuli Ncube, yesterday said Zimbabwe did not expect to benefit from the money because it does not fall under countries to receive debt relief.

“Zimbabwe does not owe money to the IMF as we paid off loans with the world body.

“The support was mainly for countries that owe the IMF and are receiving relief on payments to the body in order to support the Covid-19 response,” said Prof Ncube.

An independent economic analyst Moses Chundu also concurred with Prof Ncube and said; “It is nothing political, but just something technical emanating from the fact that we cleared what we owed to the IMF.”

According to IMF managing director Kristalina Georgieva, the relief applies to member countries affected by the global pandemic, but critically, those that owe the Bretton Woods institution and whose obligations fall due in the next two months, so they can direct their scarce resources to the deadly health emergency and economic recovery programmes. Declared by the World Health Organisation (WHO) as a global emergence, Covid-19 has killed tens of thousands across the world and infected over a million others.

The impact, however, has been massive in the USA, Italy, Spain and China. Zimbabwe has recorded 14 cases of Covid-19 including three deaths since December 2019 when the virus was discovered in Wuhan, China. In contrast, while Zimbabwe is struggling with a US$2,2 billion debt to International Financial Institutions (IFIs), including the World Bank and African Development Bank, Harare cleared its outstanding position of US$107,9 million with the IMF in October 2016.

This makes the country technically ineligible to  receive relief funds. It is also because of unpaid overdue debts that despite being current on its obligations to the IMF, Zimbabwe is still not eligible to borrow concessionary funding from the global lender in line with the pari passu principle that requires equal treatment of multilateral and bilateral lenders, except if this condition is waived.

A senior IMF official in Harare, commenting on condition of anonymity, said Zimbabwe does not qualify because of the arrears to WB, African Development, European Investment Bank and bilateral creditors.

“This is as far as traditional channels are concerned.

“We are looking if there are other ways/other funds, but it’s not promising,” the official said.

There, however, already have been futile efforts from some quarters to politicise the relief issue as evidence that Zimbabwe continues to be overlooked by the global community over political reasons such as the basis on which the nearly two decades long illegal western sanctions are founded.

Commenting on claims US had blocked IMF from giving Harare a part of the relief grant, the official said: “Zimbabwe was being blocked at the bilateral level where Washington will not allow a restructuring of an unspecified debt owed by Zimbabwe.”

The latest relief package has been extended from the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT), as part of the Fund’s response to help address the impact of the Covid-19 pandemic on members owing the IMF.

“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.

“The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the UK and US$100 million provided by Japan as immediately available resources.

“Others, including China and the Netherlands, are stepping forward with important contributions,” she said in a press statement released yesterday.

In fact, Zimbabwe saw the removal of remedial measures applied to it by IMF because of overdue financial obligations to the Poverty Reduction and Growth Trust (PRGT), effective November 14, 2016, after clearing its outstanding arrears.

These measures included declaration of non-cooperation with the IMF, the suspension of technical assistance to the country and exclusion from participating in most IMF funding programmes. On October 20, 2016, Zimbabwe fully settled its overdue financial obligations to the Poverty Reduction and Growth Trust (PRGT) using its special drawing right  (SDR), equivalent of liquid funding, holdings.

The country had been in continuous arrears to the PRGT since February 2001, before the Government started making regular monthly payments of US$0,15 million each year since 2013. In February 2015, the IMF established a Catastrophe Containment and Relief (CCR) Trust, transformed Post-Catastrophe Relief Trust, to expand the scope of its global relief efforts during disaster periods.

This allows the Fund to provide grants for debt relief for the poorest and most vulnerable countries that are hit by catastrophic natural disasters or public health disasters. The relief on debt service payments frees up additional resources to meet exceptional balance of payments needs created by the disaster and for containment and recovery efforts.

The new trust complements donor financing and the Fund’s concessional lending through the Poverty Reduction and Growth Trust (PRGT). Assistance through the CCR Trust is currently available to low-income countries eligible for concessional borrowing through the PRGT and which also have either a per capita income below the IDA Operational Cutoff (currently US$1,215) or, for small states with a population below 1,5 million and a per capita income below twice the IDA Cutoff (currently US$2 430).

The CCR Trust has two windows namely post-Catastrophe and Containment. Eligible low-income countries that are hit by public health disasters as defined the global fund would receive up-front IMF grants to immediately pay off their upcoming debt service to the IMF on eligible debt. The amount of grant support is capped at 20 percent of a country’s approved borrowing quota.

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Legendary Footballer George Shaya Dies At Age 77

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Legendary Footballer George Shaya Dies At Age 77

George ‘Mastermind’ Shaya, a five time Soccer Star of the Year and one of the most celebrated soccer legends has died.

He was 77.

Shaya died early on Tuesday morning at his home in Glen Norah A, Harare.

Shaya is among some of the most celebrated yesteryear footballers to have played for Dynamos FC and the Zimbabwe national team.

Popularly known as Mastermind, Shaya turned out for Dynamos during his playing days.

In his illustrious career, Shaya won the Soccer Star of the Year five times; 1969, 1972, 1975, 1976, and 1977, a record which is still to be replicated by any player in history.

The Mastermind passed on barely two weeks after it was announced that a documentary of his legendary career, as one of the most celebrated yesteryear footballers, would be premiered.

At the time of his death, Shaya was walking with the aid of crutches after his left leg was amputated last year.

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Chinese firm unveils US$20m Mining, Agric Loan Facility in Zimbabwe

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Chinese firm unveils Us$2om Mining, Agric Loan Facility in Zimbabwe

Chinese firm, Lovol International Construction Machinery Group, has unveiled a US$20 million equipment loan facility to benefit youths and women in the mining and agricultural sectors.

Lovol, represented by its regional director for East and Southern Africa Mr Terry Song, signed a memorandum of Understanding with the Affirmative Action Group (AAG) represented by its president Mr Mike Chimombe to provide mining and farming equipment, including tractors, electric tricycles, combine harvesters, planters, irrigation equipment, solar systems and electric cars.

The company showcased some of the machinery during the signing ceremony in Harare yesterday.

Mr Song said the company will be supporting the Government of Zimbabwe in growing the country’s economy in line with Vision 2030.

“We have the appetite to change the complexion of the economy and we realise that Zimbabweans have got a lot of potential and a missing link was the equipment. Hence we brought in the solution in terms of the equipment. The equipment that we have will certainly be able to give the solution. We have brought equipment that works for agriculture, mining and even road construction. These MoUs we have signed will go a long way in achieving vision 2030.

“Lovol is one of the biggest group in China. We have all kinds of equipment be it mining, agriculture, energy and green power as well. We intend to invest in Zimbabwe to complement Government’s efforts to achieve vision 2030 through capacitating the productive sectors of the country’s economy. Zimbabwe has abundant resources which are untapped, hence the need to bring the equipment to harness the vast mineral resources.”

Mr Terry said China was committed to make Zimbabwe an economic hub. “Together we can make Zimbabwe great.”

He also said that his company will also bring experts to Zimbabwe to service the machinery.

AAG sourced the equipment on behalf of the youths and women in mining and agriculture and will identify the particular individuals and groups who qualify for the equipment.

AAG vice president in charge of operations Mr Munyaradzi Kashambe said: “The signing of the MoU is in line with Vision 2030 .

“As the AAG we are of the strong conviction that the dream of an upper middle income economy by 2030 is indeed achievable earlier than that if we as Zimbabwe remain united and put all hands on deck and support our President. The AAG also believes in the potential of mining and agriculture as the backbone of our economy,” said Mr Kashambe.

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The coming in of Lovol is one of the fruits of President Mnangagwa’s engagement and re-engagement thrust and the policy of ensuring Zimbabwe is open for business.

“Let us all support the President’s Vision 2030 and make Zimbabwe great as per his dream. We urge all entrepreneurs to take advantage of the unending opportunities which the Second Republic has unveiled across all sectors.

“Through this partnership the US$12 billion mining economy by 2023 is indeed achievable. This deal benefits all women, youths and every Zimbabwe who are serious about the country’s economic development and Vision 2030 in general.

“As the AAG we are thankful to the visionary leadership of President Mnangagwa and will not leave any stone unturned in supporting the great vision he has for our country,” he said.

Speaking at the same occasion, AAG vice president for women and minorities Ms Anastancia Ndhlovu said the MOU was a game-changer so far as the empowerment of women, and girls and students was concerned.

“They can now access equipment and be active participants in the lucrative male dominated mining and agriculture sectors and so contribute to the country’s economic revival agenda in line with Vision 2030 and the NDS1. I urge all women and students to take advantage of this facility to set up or grow their businesses,” said Ms Ndhlovu.

Read the original article on The Herald.

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Marange teen mother’s parents face arrest

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POLICE yesterday said they had arrested Hatirarami Momberume, also known as Evans Momberume (26), following the alleged death of a 14-year-old minor on July 15 while giving birth at the Johane Marange Apostolic sect shrine in Mafararikwa, Manicaland.

Momberume is facing charges of rape or alternatively contravening section 70 of the code.

The police also said the minor’s parents were facing arrest for faking identity documents of their deceased daughter in a bid to conceal the crime.

The minor died after developing complications while giving birth at the shrine and the matter was concealed until early this month. According to police investigations, the deceased’s first name was Anna Machaya (15) although, she had been previously identified as Memory Machaya.

Police spokesperson Assistant Commissioner Paul Nyathi yesterday said that the deceased’s first name was Anna and not Memory as indicated in documents submitted by her parents.

Nyathi said girl’s parents sought to defeat the course of justice by submitting the birth certificate of deceased’s 22-year-old cousin, Memory in a vain attempt to protect the minor’s “rapist” husband Momberume.

Momberume was supposed to appear at Mutare Magistrates Court yesterday, but the matter was postponed to today.

Nyathi said police were pressing criminal charges against the deceased’s mother, Shy Mabika (36) and father Edmore Machaya (45) for obstructing the course of justice.

“Memory Machaya (22) is alive and is actually married to a man called Lameck Makonye alias Sigodhla (54) in Mhondoro. We want to tell Zimbabweans that the person who died is not Memory Machaya. The person who died is Anna Machaya. Memory is alive,” Nyathi said.

“It is clear they were hiding information and it is clear that they also produced fake documents in a bid to hide the death of Anna Machaya. Information that was being presented was now indicating as if Anna was born in 1999, meaning to say that the person by now is an adult, yet in actual fact, she was born in 2006 meaning to say by now she is 15 years old and was married off when she was a minor.

“The parents lied to the police that Anna Machaya was born on January 2, 1999. The mother went on to give police investigators a national identity card in a bid to prove that she was born on January 2, 1999. This was false. Investigations have revealed that the identity card produced to the police belonged to a namesake of the late minor, who is a daughter to Ernest Machaya. This is an uncle to the late Anna Machaya. It is through school records in Mhondoro that the police proved that the late Anna Machaya was born on July 5, 2006 to Edmore Machaya and Shy Mabika. The police have obtained the correct birth certificate copies in respect of Memory Machaya (22) and the late Anna Machaya (15). These are two different people.”

Nyathi appealed for more information on Johane Marange sect members marrying off minor children.

Machaya’s death triggered a global outcry from child rights defenders with the United Nations and several other non-governmental organisations calling on government to end child marriages. Yesterday, different girls from Johane Marange and Johane Masowe Apostolic sects pleaded with stakeholders during a virtual discussion by the Female Students Network to intervene and end early child marriages.

Apostolic sect member Moline Mukomawasha, a University of Zimbabwe student, opened up, saying she had witnessed several girls in the sect being married off.

“Sexual exploitation and the practice of cultural processes happen at apostolic sects, especially the Johane Marange sect,” Mukomawasha said.

“There is also the issue of the virginity tests which is done using unhygienic methods where fingers are inserted into a girl’s reproductive parts. Those that have lost their virginity are forced into marriage with the people that would have impregnated them.”

She said some young girls fell prey to older men during prayer sessions held at the shrines.

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