By Golden Sibanda

THE World Bank has commended the inclusive Government for making significant progress towards fixing Zimbabwe’s macro-economic challenges, but will not extend direct financial assistance until the country clears arrears with the international lending institution.

World Bank president Robert Zoellick yesterday said a better performing Zimbabwe was good for Southern Africa and the Bretton Woods institution would offer technical assistance to help the economy recover.

While noting the bank’s improved relations with inclusive Government and progress it has on the economic front, Mr Zoellick said the country needed to clear arrears with the bank to access financial assistance.

Zimbabwe owes the World Bank about US$676 million.

"The World Bank will help them (Zimbabwe) manage technical issues and challenges of a macro-economic nature and structural issues (of the economy).

"Funding will continue (from the World Bank) through NGOs, but there still are some issues of governance and challenges with the central bank, the debt from the past, which we are going to have to be cleared first. The Government is making the right progress," said the World Bank president.

Mr Zoellick said the World Bank would work with the African Development Bank to ensure that the country consolidates the positive economic gains achieved so far and that it remains on course to full economic recovery.

The local economy has stabilised since the adoption of the multi-currency system, which enabled local firms to resume meaningful production, improve product availability improved and slash the once menacing inflation to sub-zero levels.

Mr Zoellick was speaking from Ethiopia at the end of an eight-day visit to Africa, which also took him to Sierra Leone and Cote d’Ivoire.

He said efforts to repair the damage inflicted on economies by the global crisis should be sustained while ensuring that Africa’s robust economic growth momentum of the past two decades does not become only a one-off event, adding the continent needed to put in place the basis for future productivity and growth.

"We still face considerable risks in 2010 and must work to repair the damage to human lives from the global economic crisis," said Mr Zoellick.

He noted efforts by African governments to fight the global crisis and to create opportunities for growth, which left him convinced that Africa presented potential for increased economic growth.

Speaking to African leaders on the sidelines of the African Union Summit in Addis Ababa, Ethiopia, Mr Zoellick said the World Bank has committed a record US$88 billion worldwide in loans, grants, equity investments, and guarantees since the global economic crisis hit in the middle of 2008.

IDA, which provides grants and low-interest loans to the world’s 79 poorest countries, half of which are in Africa, committed US$7,8 billion to sub-Saharan African countries in 2009 year, a 36 percent jump on prior year.

The bank’s private sector arm, the International Finance Corporation (IFC), which provides investments and advisory services to build the private sector in developing countries, has seen its commitments in Africa grow to US$1,82 billion in 2009 from US$445 million in 2005.

Mr Zoellick told the African leaders the Bretton Woods institution was pioneering new ways to draw private investors to Africa.

IFC’s Asset Management Company was raising and managing private equity funds to co-invest on the continent. IFC was expecting in the next months to close on a US$500 million Sub-Saharan Africa, Latin America, and Caribbean Fund that will take equity positions in companies in these regions.

It was also expecting to seal a US$200 million Africa Capitalisation Fund that invests in systemically important banks.

The World Bank chief hailed efforts by African leaders to enhance information communication technologies in the sector, enhance more investments in ICTs and also opportunities for small business to tap in on ICT ser-vices.

To this end, the World Bank signed a memorandum of understanding with Microsoft to help Africa keep pace with global changes in ICTs.

http://www.herald.co.zw/inside.aspx?sectid=15033&cat=8