THE African Development Bank (AfDB) is left with disbursing US$1,52 million of its Arrears Clearance and Governance Enhancement Project (Acage) support facility to Zimbabwe, it has been revealed.
In October 2022, the bank approved a loan to Zimbabwe worth approximately UA3 million, the reporting currency of the bank.
UA stands for Units of Account and is akin to the Special Drawing Rights of the International Monetary Fund.
Of this approved amount, as of last Friday, UA1 855 898,70 (US$2,46 million) had been disbursed, with the remainder converting to US$1,52 million.
According to the bank, the objective of the project is to support the arrears clearance process, sustainable management of debt and enhance public oversight, thereby allowing for the facility to contribute to macroeconomic stability and fiscal consolidation.
This is because Zimbabwe’s public debt stock of US$21,2 billion is hindering the country from accessing fresh financing at a time when Treasury noted the nation had a capital requirement of US$40 billion.
“The specific objectives of the project are to: (a) enhance capacity on arrears clearance and debt management; and (b) strengthen governance and oversight function of government,” AfDB said in an update of the project last Friday.
“The project has three components, namely (a) Enhanced capacity on arrears clearance and debt management; (b) Strengthened accountability and oversight; and (c) Project management.
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“Arrears clearance and sustainable debt management are critical for macroeconomic stabilisation and fiscal consolidation while combating corruption and strengthened oversight prerequisites prudent use of public resources and re-engagement with the international community.”
The first component, titled Enhanced Capacity on Arrears Clearance and Debt Management, seeks to support the government’s efforts to clear its arrears with international creditors, including the AfDB, and management of its public debt.
“Arrears clearance will lead to the country’s removal from the sanctions list and enhance the country’s ability to access concessional financing for socio-economic development,” AfDB said.
“This will be achieved through two subcomponents: (i) Strengthen engagement and dialogue on arears clearance and debt restructuring; and (ii) Strengthen capacity on debt management.”
The second component, titled Strengthened Accountability and Oversight, seeks to enhance accountability and public oversight with a view to strengthening governance and combating corruption.
“Sustainable debt management requires strong accountability systems that support sound macroeconomic and public financial management practices,” AfDB said.
“This will be done through sub-components, namely: (i) Strengthen capacity in implementation of anti-corruption and accountability strategies; (ii) strengthen regulatory framework in combating corruption and illicit financial flows; and (iii) strengthen external scrutiny and oversight.”
The bank said that both outcome and output level targets were on track and rated satisfactory.
“Government urged to remain on track in implementing economic, governance, and land tenure as well as farmer compensation measures for the project to achieve its intended objectives,” AfDB said.
“IP [implementation progress] criteria measures are on track. However, absence of M&E [monitoring and evaluation] specialist is affecting project monitoring and reporting.
“Similarly, absence of the PMU [project management unit] manager also has led to the overloading of work on the acting manager. Government expects to fill these positions by the end of December 2024.”
The bank said only one IP level indicator, the lack of an M&E specialist, was rated unsatisfactory.
Of the total debt stock, US$13 billion and US$8,2 billion is external and domestic debt, respectively, according to the AfDB.
