We're not about to fund Zim, says World Bank

Harare - The World Bank has denied media reports that it is about to resume lending to cash-strapped Zimbabwe.

Widely-circulated reports this week suggested that the World Bank was working on a bail-out package for Zimbabwe that could see it handing over $400 million to President Robert Mugabe's government starting next year.

The claims elicited howls of protest from opponents of the 92-year-old leader. A leaked document appeared to show that the World Bank had ignored the government's unpopular decision to print its own banknotes and turned a blind eye to recent reports of rights violations during a wave of anti-government protests.

But now the global lender says the leaked document the reports were based on was "an unofficial draft document that has not been approved."

"The World Bank will only resume direct lending to Zimbabwe when the issue of arrears is resolved," a statement from them added.

Zimbabwe owes the World Bank $1.1 billion, according to the central bank governor John Mangudya.

A mid-term fiscal policy review presented by the finance minister Patrick Chinamasa this week showed the dire straits that troubled Zimbabwe is in financially. The minister admitted that the wage bill for civil servants ate up 96.8% of revenue - and that the authorities might be unable to meet that bill by the end of the year.