By Lesley Wroughton
WASHINGTON, July 28 (Reuters) – Zimbabwe cannot afford
another period of chaos and uncertainty, the head of the African
Development Bank, Donald Kaberuka, warned on Sunday, just days
before the country goes to the polls.
Kaberuka said in an interview with Reuters that he hoped
Wednesday’s election would be considered credible by Zimbabwean
voters and neighboring countries so the economy can continue its
recovery since the last election in 2008 was marred by violence.
“The last thing Zimbabwe wants is another period of chaos
and uncertainty and investors sitting on the fence,” said
Kaberuka, a former finance minister of Rwanda.
“They should build on the progress they have made over the
last few years by an election seen to be fair and transparent.
This is what they need,” said Kaberuka, who was in Washington to
receive awards from the U.S. Treasury for development projects
funded by the Bank.
After more than a decade of economic decline, mismanagement,
food shortages and hyperinflation of more than 500 billion
percent, blamed on the policies of President Robert Mugabe,
Zimbabwe’s economy has started to recover in recent years.
Mugabe’s 33-year hold on power is being challenged by
opposition leader Morgan Tsvangirai, 61, with whom he was forced
into a unity government after the 2008 election violence.
For years Mugabe, 89, and members of his ZANU-PF party have
been restricted by Western sanctions. The United States has said
it would be willing to consider easing the sanctions if this
election is seen as free, peaceful and transparent.
However, Tsvangirai, who is making a third run for the
presidency, has questioned what he called chaotic preparations
for the elections and warned that the credibility of the vote is
at risk. Mugabe dismissed his opponent’s charges of vote rigging
as unfounded complaints of a “political cry baby”.
Finance Minister Tendai Biti has also cautioned that any
disputes over the election would undermine the economic
recovery. Last week Biti, a senior member of Tsvangirai’s
Movement for Democratic Change party, cut his 2013 economic
growth forecast to 3.4 percent from a previous projection of 5
percent this year, compared to 4.6 percent in 2012.
Kaberuka said a credible election would spur business
confidence and investment at a time when many African countries
are booming from increased investor interest and average growth
rates of 6 percent and higher.
Zimbabwe would also become eligible for debt relief from
international financial institutions, including the
International Monetary Fund and the World Bank, he said.
STANDING BY FOR EGYPT
Kaberuka also cautioned that the economic situation in Egypt
was worsening amid the political turmoil that killed 72 people
in demonstrations on Saturday.
Kaberuka, whose institution has supported the Egyptian
economy with funding, said that any new lending would have to
wait until Egypt had sealed an agreement with the IMF on
macro-economic issues.
“New lending is constrained by the lack of an agreement with
the Fund, which I think is very much needed,” said Kaberuka,
whose institution is temporarily headquartered in Tunisia. “We
are on standby.”
The development bank pledged $500 million to Egypt last year
to deal with its budget crunch.
Kaberuka said an agreement with the IMF and development
banks would boost investor confidence, and help Egypt with
deep-seated issues such as wasteful energy subsidies to the rich
that are draining precious currency reserves.
After several attempts, the IMF failed to clinch a final
$4.8 billion deal with Egypt’s former government of Mohamed
Mursi, who was ousted by the military earlier this month.
IMF member countries are unlikely to authorize fresh talks
with between the Fund and an interim government in Egypt that
has no international status.
The new Egyptian finance minister, Ahmed Galal, has played
down talk of resuming negotiations with the IMF, saying it was
“only part of the solution.”
The country has been struggling since investors and
tourists, two vital cash streams, fled after the uprising that
toppled Hosni Mubarak in 2011. The revolt gave Egypt its first
democratically elected president, Mursi.
(Reporting by Lesley Wroughton; editing by Christopher Wilson)
