Aid Group Says Zimbabwe Misused $7.3 Million

JOHANNESBURG — The government of Zimbabwe, led by President Robert Mugabe, spent $7.3 million donated by an international organization to fight killer diseases on other things and has failed to honor requests to return the money, according to the organization’s inspector general.

The actions by Zimbabwe have deprived the organization, the Global Fund to Fight AIDS, Tuberculosis and Malaria, of resources it needs and damaged efforts to expand life-saving treatment, said the inspector general, John Parsons. Zimbabwe’s actions also jeopardize a more ambitious $188 million Global Fund grant to Zimbabwe, due for consideration by the fund’s board on Friday, Mr. Parsons said.

The Global Fund has continued to demand that Zimbabwe return the money, and Global Fund officials say Zimbabwean financial officials have promised to do so by Thursday. But Mr. Parsons said Zimbabwean officials also said they had not repaid the money because they did not have enough foreign currency.

The breakdown of trust between the Global Fund and Zimbabwe’s government comes at a time of widening humanitarian crisis and casts further doubt on the willingness of Western donors to invest heavily in rebuilding the economically broken nation as long as Mr. Mugabe is in charge, even if a deadlock over a power-sharing government is resolved.

Mr. Parsons said in an interview on Sunday that last year the Global Fund deposited $12.3 million in foreign currency into Zimbabwe’s Reserve Bank. He declined to speculate on how the $7.3 million it was seeking to be returned had been spent, except to say it was not on the intended purpose. Civic groups and opposition officials maintain that the Reserve Bank helps finance Mr. Mugabe’s patronage machine.

Mr. Parsons did offer an example of the human consequences of the Reserve Bank’s failure to hand over the money for disease fighting. The Global Fund has brought in large quantities of medicines that can cure malaria but has been able to finance the training of only 495 people to distribute them safely instead of the planned 27,000. There were 2.7 million cases of malaria among Zimbabwe’s 12 million people in the World Health Organization’s most recent estimates.

“The drugs expire by the middle of next year, and it would be criminal if we can’t use them because of these problems,” Mr. Parsons said. “They’ve got quite a short shelf life.”

Zimbabwe’s information minister, Sikhanyiso Ndlovu, said Sunday in an interview that he was not aware of the particulars of the disagreement, but he defended what he described as the Reserve Bank’s good intentions and accused the Global Fund of politicizing aid.

“They always want to put certain standards and concoct certain things to make us look bad and horrendous in international eyes,” he said.

Gideon Gono, governor of the Reserve Bank, the custodian of the Global Fund’s money, has been spending large sums this year on a variety of things, according to reports in Zimbabwe’s state-owned media.

Mr. Gono gave the country’s judges new vehicles, satellite dishes and televisions and allocated 79 vehicles for the Information Ministry. He announced the provision of 3,000 tractors, 105 combine harvesters and 100,000 plows for the country’s farm mechanization program. Mr. Ndlovu, the information minister, said the Reserve Bank had been getting foreign currency for imports of food and medicine.

Mr. Ndlovu said the Global Fund had sided with Western nations that had restricted aid to Zimbabwe and imposed sanctions on it — sanctions that Mr. Mugabe and his party blame for the country’s economic ruin.

“The money from the Global Fund is nowhere near what the Reserve Bank has spent on health care for the country,” the information minister said.

Civic groups and opposition officials contend that Mr. Gono and the Reserve Bank have helped finance the governing party’s patronage operation, essential to Mr. Mugabe’s hold on power for the past 28 years. Eddie Cross, a senior official in the opposition Movement for Democratic Change, accused the Reserve Bank of looting the Global Fund’s donation.

International aid groups and United Nations agencies say the country’s annual inflation rate of more than 230 million percent and rules imposed by the Reserve Bank have severely complicated the logistics of helping the most impoverished people.

The Reserve Bank suspended electronic banking a month ago, making it impossible for international organizations to pay for goods and services with bank transfers. The Reserve Bank has also severely limited cash withdrawals from commercial banks. And the inflation rate has rendered check payments nearly worthless by the time they clear days later.

More than 20 aid groups, donor countries and United Nations agencies wrote Mr. Gono last week asking that electronic banking be restored for humanitarian aid purposes and that they be allowed to pay service providers in foreign currency. If agencies are increasingly unable to pay for their field operations, they wrote, that inability will “greatly increase the already substantial suffering of those Zimbabweans who are most in need of humanitarian response.”

A third of Zimbabweans are now hungry and in need of food aid, the United Nations estimates. A million children have lost one or both parents. About 140,000 people died of AIDS there last year.

Mr. Mugabe’s government banned the work of international aid groups for almost three months during the election season earlier this year, accusing them of backing the political opposition. The ban was lifted on Aug. 29, two months after Mr. Mugabe was declared the victor in a discredited presidential runoff election. His main rival, the opposition leader Morgan Tsvangirai, dropped out of the race, citing state-sponsored violence against his supporters.

It has taken time for the aid groups to resume work. One major humanitarian group, which declined to be identified by name for fear of retaliation against its staff by government officials, said it would be able to get food to only half as many people as originally planned this month because of the difficulties of paying for its logistical operations.

The Zimbabwe office of the United Nations Children’s Fund, which coordinates one of the world’s largest programs for orphans, decided Friday that it could no longer pay the local groups it supported there by check, seriously hampering its ability to help the most vulnerable children and their mothers, said Roeland Monasch, Unicef’s acting representative in Zimbabwe.

Mr. Monasch said the United Nations’ daily posting of the country’s exchange rate showed that the number of Zimbabwe dollars required to buy a single American dollar rose from 3 million on Oct. 23 to 1 billion the next day, and then to 40 billion on Wednesday and 1.1 trillion on Saturday. For Unicef to continue operating, he said, it must start using American dollars.

Mr. Parsons, the Global Fund inspector general, who presented the preliminary findings of a Global Fund audit on Tuesday in Harare, Zimbabwe’s capital, to donor nations and United Nations agencies, said in the interview that he had met with Reserve Bank officials to tell them, “We need our money back.”

But Reserve Bank officials have told the Global Fund they do not have the foreign currency required, Mr. Parsons said, so, “One has to assume they spent it on other things.”

In Mr. Parsons’ presentation to donors, a slide on program management featured a Cameroonian saying: “Trust in Allah but tie your donkey.” The Global Fund’s management, known as the secretariat, has not released any new money to Zimbabwe since last December and will not disburse more until the problems in protecting the Global Fund’s donations are resolved, he said.

“We cannot safely leave foreign exchange in Zimbabwe,” Mr. Parsons said. “The secretariat has to find some other means to safeguard our funds — to keep it offshore and drip-feed it into Zimbabwe. It can’t be under the Reserve Bank or anyone influenced by the Reserve Bank.”