Zimbabwe promises to repay missing malaria millions (News Feature)

By Jan Raath Nov 6, 2008, 11:42 GMT

Harare - President Robert Mugabe's regime has promised it will repay an international donor organization 6.5 million US dollars that was meant for the country's anti-malaria campaign but which has mysteriously disappeared.

The money was part of a 103-million-dollar grant from the Geneva- based Global Fund to Fight Aids, Tuberculosis and Malaria, 28.5 million dollars of which was destined to the Health Ministry for prevention and treatment of malaria, the often fatal mosquito-borne disease that affects nearly 3 million Zimbabweans.

However, reports this week quoted John Parsons, the Global Fund's inspector-general, as saying that 7.3 million dollars deposited with the Reserve Bank of Zimbabwe (RBZ) had gone missing.

The money had been meant to train 27,000 people in the distribution of millions of dollars worth of anti-malaria drugs, but had only been enough to train 495. He said the money 'was not used for its intended purpose.'

Civic groups have suggested that the money was spent by the bank on political patronage for President Robert Mugabe's Zanu-PF party, particularly in the run-up to elections in March and June this year.

The Reserve Bank handed out hundreds of imported limousines, tractors, combine harvesters, plasma television sets and other goodies to woo voters and pay off Mugabe's cronies.

The government initially denied the money had gone missing, but has since made a tacit admission that the money was no longer in the central bank. State media on Thursday quoted Health Minister David Parirenyatwa as saying that government would 'pay back' 6.5 million dollars within the next seven days.

'Zimbabwe pledges to sustain continued dialogue with the Global Fund through clearance of all outstanding obligations amounting to around 6.5 million US dollars over the next seven days,' he was quoted as saying in the Herald newspaper.

Zimbabwe is hoping for another 188 million US dollars in another round of grants from the Global Fund next year, but observers say the affair of the missing money has jeopardized the payout.

RBZ governor Gideon Gono was also quoted as saying that 'we have never refused to acknowledge the liability,' but did not explain why the money had gone missing.

Nor did he explain the discrepancy between the 7.2 million dollars cited by the Global Fund and the 6.5 million dollars the government says it owes. 'Only cheap minds would go so far as to suggest that the money was used to buy tractors and TV sets,' he said.

The central bank is deemed by international finance organizations to be 'technically bankrupt.'

Around the election period this year, hundreds of local and foreign aid agencies and companies reported that the central bank had commandeered many millions of dollars of their money held in foreign- currency accounts.

Gold mining companies have also complained of being owed more than 30 million dollars from the bank, to which they are obliged by law to sell their output.

The Global Fund's Parsons said the bank had not repaid the money owed 'because they didn't have enough foreign currency.'

Parsons said the government had assured him that payment would be made Thursday, but Parirenyatwa and Gono said the debt would only be covered by Thursday next week.

The Global Fund's technical committee has already given the nod for the 188 million dollars for next year, but has yet to make a final decision.

The disappearance of the cash comes as Zimbabwe's once robust economy gallops towards full collapse, as characterized by inflation officially put at 231 million per cent (but estimated at several times that), an estimated three million people requiring food aid and a cholera outbreak.

The populist policies of the 84-year-old Mugabe are widely held responsible. Mugabe signed a deal with the opposition in September to share power, but the deal has yet to be implemented.