Zimbabwe returns US$7.3m Global Fund money

by Own Correspondent

JOHANNESBURG - The Global Fund to Fight Aids, Tuberculosis and Malaria on Friday said Zimbabwe's central bank had returned $7.3 million of aid money it had confiscated from the fund.

"The Global Fund greatly appreciates this development which will accelerate the life-saving activities of the malaria, TB and HIV programmes supported by the Global Fund in Zimbabwe," the fund's executive director, Michel Kazatchkine, told the media in India.

The Global Fund had warned on Thursday that it would not disburse anymore funds to the southern African nation until the Reserve Bank of Zimbabwe (RBZ) returned its money.

The Global Fund, launched by the G8 in 2002, has already given grants worth up to $88 million to Zimbabwe, which has the fourth-highest rate of HIV prevalence in the world, according to 2007 data.

According to Kazatchkine, the foreign currency that the RBZ had failed to account for was part of US$12.3 million that the fund deposited last year into three Zimbabwean commercial banks to cover training and other local financial needs of its programmes in the southern African country.

The hard cash ended up in RBZ coffers when sometime in late 2007 commercial banks were directed to "lodge" all foreign currency with the central bank.

The RBZ would in turn release foreign currency in its custody to commercial banks upon request. But the central bank - which is battling to raise hard cash to keep President Robert Mugabe's government afloat - has been erratic in releasing foreign currency.

In April this year the RBZ virtually stopped making further hard cash payments and in the process crippling several foreign-funded humanitarian projects, including programmes by Global Fund to combat disease in the country.

Media reports had alleged that the aid money was handed out by the reserve bank to buy tractors and expensive televisions but Kazatchkine said the Global Fund has "no evidence of fraud". The Reserve Bank of Zimbabwe also denies the charge.

The Global Fund says it has prevented 2.5 million people dying from HIV/Aids, TB and malaria worldwide. It is set to grant up to $3 billion dollars in new funding by Saturday after a meeting in India.