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Cabinet approves RBZ by-pass fund
Lebo Nkatazo, NewZimbabwe.com
June 11, 2009

http://www.newzimbabwe.com/news-425-Cabinet+approves+RBZ+by-pass+fund/news.aspx

Zimbabwe's unity government has approved a policy that sidelines the Reserve Bank of Zimbabwe from handling any loans and financial aid coming into the country, documents showed Thursday.

Cabinet has approved the establishment of the Multi-Donor Trust Fund for Zimbabwe within the Ministry of Finance in an effort to allay concerns by western countries that financial aid to the country could be misused.

"Development assistance from these bilateral partners shall be fully accounted for in government's planning through the Ministry of Finance. Bilateral support shall be encouraged to be deposited into the MDTF to allow for easier co-ordination," the approved policy document says.

It said the MDTF shall be co-chaired between the Ministry of Finance and developmental partners.

However, in that core group, apart from the Finance Ministry, there would be ministries of Regional Integration and International Cooperation as well as the Ministry of Local Government, Rural and Urban Development.

"The Aid Coordination Unit located in the Ministry of Finance shall primarily be responsible for the financial accountability of donor funds. Specific responsibilities of the unit shall include, among others: production of consolidated reports on donor aid and monitor reporting compliance for projects implemented," the document adds.

It also establishes an Aid Technical Committee -- a grouping of technocrats whose responsibility would be to plan and monitor projects in line with priorities set by the Cabinet committee on aid co-ordination. Western countries are holding back aid to Zimbabwe's four-month-old power sharing government, citing in part President Robert Mugabe's refusal to grant demands by his coalition partners for Reserve Bank Governor Gideon Gono to be removed from his post.

But chiefly, the west remains seized with the plight of white commercial farmers who are reporting a wave of new farm invasions. The unity government has dismissed the claims exaggerations.

The Cabinet's approval of the fund is a major boost for Prime Minister Morgan Tsvangirai who meets US President Barack Obama on Friday, keen to present a picture of normalcy in Zimbabwe after a decade-long political and economic crisis.

Tsvangirai formed a unity government with Mugabe, his former nemesis, on February 11. He is visiting the US sand Europe this week and next seeking billions of dollars to kick-start Zimbabwe's recovery.

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