1 September 2011, Sweetcrude, Harare – Zimbabwe needs $13 billion – about double its estimated Gross Domestic Product (GDP) – to revive its dilapidated energy sector, but is still a “long way” from having a normal relationship with the World Bank, a senior bank official has said.
Country Director Kundhavi Kadiresan told reporters a lack of clarity over a black empowerment push was also preventing investment in an economy that was nevertheless showing “impressive” growth.
“Institutions like the World Bank and others are really keen to work with the government in terms of getting this country back on track,” she said. “However, there is still a long way from normal relationship due to arrears and lack of policy clarity.”
A coalition government set up by President Robert Mugabe and Prime Minister Morgan Tsvangirai in 2009 adopted foreign currencies to replace a local unit wrecked by hyperinflation.
Since their introduction, the economy has recovered from a decade of decline, and the government projects it will expand 9.3 per cent this year, while inflation is down to single-digits from a peak of 500 billion per cent in December 2008.
However, the coalition is sharply divided over economic policy, including how to address Zimbabwe’s defaulted debt and implement a 2008 empowerment law that seeks to compel foreign-owned forms to sell majority stakes to locals.
