23 December 2013

Zimbabwe's External Debt Now U.S.$6.1 Billion

ZIMBABWE'S external debt currently stands at US$6.1 billion, says Finance and Economic Development Minister Patrick Chinamasa.

Chinamasa said resolution of the debt overhang is key to normalising the country's relations with international financial institutions and bilateral creditors.

Presenting the 2014 National Budget in Parliament here Thursday, Chinamasa said total external public and publicly guaranteed debt excluding Reserve Bank and private sector debt as at Dec 31, 2012 stood at US$6.077 billion.

"It has become one of the serious impediments to the country's developmental agenda," he said.

"The continued accumulation of external debt payment arrears is seriously undermining the country's creditworthiness, and compromising our ability to secure new financing from both bilateral and multilateral sources."

In November 2010, the government approved the Zimbabwe Accelerated Arrears Clearance Debt and Development Strategy (ZAADDS) to pave the way for negotiating the clearance of arrears and debt relief for the country.

The key tenets of ZAADDS are the establishment of a Debt Management Office in the Ministry of Finance; undertaking a validation and reconciliation exercise of Zimbabwe's public and publicly guaranteed external debt database with all creditors; and leveraging natural resources in pursuit of debt relief among others.

Chinamasa blamed economic sanctions imposed by the West for the accumulation of the external debt.

"It is a cost, which we have had to pay for daring to re-assert our sovereign control over our land and God-given natural resources," he said.

Chinamasa said the government remained committed to engaging the Bretton Woods institutions over the debt, and the sanctions which he noted were not in the interest of either party.

"I call on all our creditors to seriously consider granting us debt relief and at the same time providing us with new funding so that we can broaden our revenue base to enhance our capacity to honour our obligations to ourselves and to our creditors," he said.

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