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Reserve Bank of Zimbabwe releases Global Fund money

07 November 2008

Geneva – The Reserve Bank of Zimbabwe (RBZ) late last night released US$7.3 million belonging to the Global Fund to Fight AIDS, Tuberculosis and Malaria, which it had held on behalf of three commercial banks. The Global Fund had requested the immediate release of this money in September, but the Reserve Bank said it would release the funds by 6 November. Through its release last night, the Reserve Bank honored that commitment.

“The Global Fund greatly appreciates this development which will accelerate the live-saving activities of the malaria, TB and HIV programs supported by the Global Fund in Zimbabwe,” says Dr Michel Kazatchkine, Executive Director of the Global Fund. “We expect that this signals a more effective way of working in Zimbabwe, accelerating delivery of interventions against the three diseases in the country.”

The Reserve Bank also informed the Global Fund that all funding recipients will be permitted to use US dollars for all transactions within Zimbabwe, eliminating exchange rate risks in Zimbabwe’s hyper-inflationary environment.

The Global Fund will continue its work to ensure that future disbursements to Zimbabwe reach recipients without risk of diversion or delay.

Background:

The Global Fund has a portfolio of five ongoing grants in Zimbabwe with an approved maximum value of US$88 million. The Global Fund has disbursed just over US$39 million between 2004 and 2007 resulting in a significant scale up of life-saving interventions, including 13,000 patients enrolled for Antiretroviral Treatment, and over 330,000 insecticide treated bed nets distributed.

The large majority of spending of the Global Fund supported grants in Zimbabwe is in the form of procurements of goods which take place through payments made to suppliers outside Zimbabwe. Some funds are also disbursed to three commercial banks in Zimbabwe to cover training and other local financial needs of the programs. In the fall of 2007, all commercial banks were required to ‘lodge’ foreign currency with the Reserve Bank of Zimbabwe (RBZ). And a total of US$12.3 million of funds from the Global Fund grants was transferred from the commercial banks to the RBZ. After some initial withdrawals, it became impossible for the Principal Recipients of Global Fund grants to draw funds from their accounts. This situation, in addition to the breakdown of some basic functions in the health service, shortages of fuel and other commodities and staff shortages, is detrimentally affecting program implementation including the supply and distribution of drugs and other commodities.

After repeated delays in withdrawing funds, the Global Fund have been demanding that the remaining US$7.3 million be immediately transferred back to the commercial banks where the Global Fund Principal Recipients hold accounts.

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