NEW DELHI, INDIA - Nov 06 2008, An international aid agency has decided against giving new healthcare funds to Zimbabwe to fight HIV/Aids and other diseases until the country's central bank returns $7-million it confiscated last year, a top agency official said on Thursday.
Zimbabwe's Reserve Bank failed to meet the deadline on Thursday to transfer the money to the aid agency and it has now promised to do that next week, Michel Kazatchkine, executive director of the Global Fund to Fight Aids, Tuberculosis and Malaria, told reporters.
"We will not sign any new grants even if the fund board approves future grants to Zimbabwe unless that money is fully recovered," Kazatchkine said.
Meanwhile, Zimbabwe's government said it would release the money, state media reported on Thursday.
"We have never refused to acknowledge the liability," Reserve Bank Governor Gideon Gono told the Herald, saying the money would be cleared in seven days.
Zimbabwe has one of the world's worst HIV/Aids pandemics, a collapsing health infrastructure and a growing hunger crisis. Besides the issue of corruption, the country's cash shortages and banking problems are severely hampering efforts to feed the hungry and care for the sick, according to several aid agencies.
Kazatchkine's comments came a day before his aid agency was to hold its board meeting in New Delhi to consider among other things a request by President Robert Mugabe's government for an additional $400-million in healthcare funds.
"We have no evidence of fraud," he said in response to a question whether Zimbabwe's government has misused millions of dollars meant to fight HIV/Aids.
Until 2007, the aid agency channelled healthcare funds to Zimbabwe through local banks, which transferred money to agencies carrying out health programmes, Kazatchkine said.
However, the Global Fund in 2007 decided to buy drugs from outside Zimbabwe as the country's economic crisis worsened with hyperinflation, he said.
Since some operations needed to be funded in Zimbabwe, a certain amount of money was left with local banks, which the country's Reserve Bank confiscated last year, according to Kazatchkine.
Zimbabwe's central bank already has returned $5-million of the seized $12-million, he said.
The Global Fund, conceived in 2001 when the Group of Eight richest governments pledged to step up funding to fight HIV/Aids and other global pandemics, is primarily a fundraising and disbursing agency based in Geneva.
Mugabe, in power since independence from Britain in 1980, blames Western sanctions against his government for his country's extreme economic crisis. But critics point to corruption and mismanagement under his increasingly autocratic leadership.