30 March 2014

Zimbabwe: Govt Moves in to Repay External Debt

ZIMBABWE has entered into a repayment plan with creditors as it moves to settle the US$6,1 billion external debt, Finance minister Patrick Chinamasa has said.

The country desperately needs lines of credit from multilateral institutions to help rebuild the economy.

"We entered into a payment plan with the Bretton Woods Institute and so far we have been fulfilling that. It's a token payment as you will appreciate," Chinamasa said.

Chinamasa said token payments are a commitment that the country is ready to resolve its external debt situation.

Zimbabwe owes the International Monetary Fund (IMF) US$124 million, African Development Bank (AfDB) about US$800 million (of which US$528 million is in arrears) and US$1,4 billion to the World Bank.

In its annual Article IV consultation report, IMF urged Zimbabwe to engage with its creditors to work towards a solution to the long-standing debt arrears problem.

Chinamasa said he told the IMF team on a recent visit to Zimbabwe that the country needed a constructive engagement.

"I want us to have a relationship which emphasises the fact of our membership in the IMF," he said.

Zimbabwe's relations with IMF have improved, evidenced by the global lender agreeing to a supervised economic reform programme. The programme is ending in June.

Last year, the World Bank crafted a three-year strategy for Zimbabwe focusing on fostering private sector-led growth, creation of an enabling environment and reducing societal vulnerabilities.

The programme runs up to next year.

AfDB has been availing funds to Zimbabwe indirectly through the African Export-Import Bank and PTA where it is shareholding.

In 2011, AfDB announced that it was giving a fish project in Kariba, Lake Harvest, US$11 million, the banking group's first private sector investment in years.

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