Donor gives $37.9M to Zimbabwean government

ZimbabweAn international donor on Friday took the unusual step of giving $37.9 million in aid directly to Zimbabwe’s new unity government instead of channeling it through private groups.

Others have been unwilling to deal with a government headed by Robert Mugabe, who remains president in the coalition formed in March with former opposition leader Morgan Tsvangirai.

The Global Fund ? which had a financial dispute with Zimbabwe’s previous government ? handed over the grant to help Zimbabwe fight AIDS, tuberculosis and malaria in a ceremony Friday at Tsvangirai’s office.

“This is an indication that the inclusive government is now working fully and is being accepted by the international community,” Tsvangirai said Friday. “The gesture by the Global Fund shows that they are beginning to understand us better and we hope that this will send a positive statement to the other international donors worldwide to come and work with us.”

In 2007, Zimbabwe’s central bank confiscated U.S. dollars being held in local bank accounts, including about $12 million belonging to the Global Fund. When the central bank failed to return its money, the Global Fund went public, threatening to cut off aid. Its funds were eventually returned.

Zimbabwe’s Reserve Bank governor later admitted he took hard currency from the bank accounts of private businesses and foreign aid groups without permission.

The central banker, Gideon Gono, said he gave the money from the hard currency accounts as loans to various ministries, reimbursing the private accounts when the ministries repaid the loans.

“We had bad experiences with the Reserve Bank,” Fareed Abdullah, the Global Fund’s Africa director, said Friday. “Now we want to open a new chapter with the prime minister and his government and see how they are going to use the money.”

Abdullah said fund officials had spoken with Finance Minister Tendai Biti, who is a top Tsvangirai aid, and were assured “that the money will be put to its intended use and that the Reserve Bank under his ministry portfolio will be accountable and transparent.”

Gono remains head of the central bank. Tsvangirai has objected to Gono’s appointment by Mugabe.

Copyright 2009 The Associated Press.