Financial Gazette (Harare)
Munyaradzi Mugowo
13 November 2009
Harare — THE Vice-President of the African Export-Import Bank (Afreximbank), Okey Oramah, was due to meet President Robert Mugabe last week to break the impasse between the bank and the Ministry of Finance over Zimbabwe's outstanding debt obligations.
The meeting may pave the way for two deals to be signed any time soon, which include the contentious debt refinancing schedule and a new loan arrangement to fund the Short-Term Emergency Recovery Programme.
Afreximbank last month decided to seek the intervention of President Mugabe after it realised that the Ministry of Finance was reluctant to make a concrete commitment to honour its outstanding debt obligations.
Oramah flew into the country on Tuesday last week to resume talks -- which were adjourned the previous week after "disappointing results" -- with Finance Minister Tendai Biti and Reserve Bank of Zimbabwe Governor Gideon Gono divided, on how to refinance Zimbabwe's outstanding debt with the multilateral lender. The country owes Afreximbank US$59 million borrowed to support banking institutions.
"We didn't make much progress last week. That's why I had to come back. The point is to get Zimbabwe to say how they plan to refinance the debt in order for us to release the US$300 million," an Afreximbank official told The Financial Gazette last week.
"We have had a good relationship with the RBZ for many years but there now seem to be problems since we started dealing with the Ministry (of Finance)".
Biti ended the RBZ's six-year relationship with Afreximbank when he transferred all matters of public borrowing, including ones ordinarily requiring central bank facilitation, to his ministry saying they were "fiscal matters".
Oramah says the RBZ has already signed the draft loan agreement, but the Ministry of Finance was still saying it needed to "finalise some issues".
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