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HARARE, — Relations between Zimbabwe and the World Bank yesterday marked a new turn as the multilateral lender announced the establishment of a fund to reconstruct the country.Political differences between Harare and major shareholders in the World Bank particularly the United States over land reforms to correct a colonial legacy, Zimbabwe has not been able to access any form of funding from the Bretton Woods institution over the past decade, resulting in stagnation of its economy.

The country was only receiving technical assistance.

But in what signalled a new chapter in relations, World Bank country director for Malawi, Zambia and Zimbabwe, Kundhavi Kadiresan said the Breton Woods institution had approved the fund in May as part of its efforts to support the country’s economic development objectives.

The government will also directly benefit from the facility, known as the Zimbabwe Reconstruction Fund (ZimRef).

“The main purpose of this ZimRef fund is basically to help us expand our activities here and it will go beyond technical assistance and capacity building and analytical work,” Kadiseran said.

“For the first time we will also have activities including investment projects. We will be working very closely with government on priority areas.”

So far, development partners have contributed $40 million into the fund which is expected to shoot up to $100 million next year, he said.

Major contributors for the fund will include the European Union, United Kingdom, Germany, Norway, Denmark, Sweden, the World Bank and Peace Building Fund.

Kadiseran said the Zimbabwean government  and the World Bank were steadily improving cooperation and “moving towards Zimbabwe being able to access support from international finance institutions.”

She said efforts would also be made towards addressing Zimbabwe’s debt situation with the multi-lateral lender which is estimated at around $1 billion.

Finance and Economic Development Minister Patrick Chinamasa lauded the World Bank for establishing the fund, which he said, would assist the country in pursuing and implementing its reform agenda.

“What I welcome about the ZimRef fund is the flexibility that it will give me to tackle some of the urgent reforms measures that I want to address and these are in the areas of parastatals reform,” he said.

“We must know what these animals are otherwise any reform that is not guided by facts will be a witch hunt and I do not want to be involved in a witch hunting exercise,” he said.

Chinamasa said parastatals and local authorities reform as well as audit of the civil service are among key areas that the fund would support.

He said the World Bank’s support was critical in guaranteeing the recovery and growth of the economy.

“You may not like them but what they say guides how the world deals with you. The assessment could be wrong but what they say about you will carry globally and will have a negative effect on how we do business and how we manage our economy,” he said.

Chinamasa said the government would mid next year engage the World Bank on options to address the country’s debt.

He said the government had been making token payments towards addressing the debt due to limited fiscal space.

Meanwhile, the World Bank has extended a $75 million loan for the rehabilitation of the Kariba Dam Wall.

Sweden has also extended a $25 million grant towards the $295 million budgeted for the rehabilitation exercise. — New Ziana.