AfDB writes off Zim's $600m debt

HARARE - The African Development Bank (AfDB) says it will unveil funds to Zimbabwe aimed at clearing the country’s over $600 million debt.

AfDB executive director, Sibry Tapsoba, yesterday told reporters that the regional lender had come up with a plan to help Zimbabwe settle its arrears, which have been hindering the country from accessing new and cheap loans from multilateral institutions.

“The total amount of Zimbabwe’s arrears to the African Development Bank is $601 million. The resources that we are putting aside will clear the African Development Bank arrears only,” Tapsoba said.

Tapsoba, who is leading a 12-member AfDB delegation in the country to examine Zimbabwe’s debt repayment strategy for its $1,8 billion arrears to the AfDB, International Monetary Fund (IMF) and the World Bank (WB), said the transaction was still awaiting board approvals.

Finance minister Patrick Chinamasa said the funds would go a long way in helping the country clean its balance sheet.

“The AfDB is set to avail funds to assist Zimbabwe in arrears clearance, but the amount to be availed is set to be determined by the AfDB board. This money will be ready soon and available up to December 2016,” the Treasury chief said.

Chinamasa said Zimbabwe was in a “hurry” to clear the arrears by the end of the year, adding that the country was going to set the process in motion as soon as the AfDB availed the money.

“We have different strategies to clear different arrears, so we are optimistic we are on the right track,” said Chinamasa.

Tapsoba also said that the AfDB was also going to avail a $5 million grant for Zimbabwe’s membership in trade bloc, African Trade Insurance.

“The move is to ensure the reduction in cost of doing trade in Africa as Zimbabwe will gain access to African markets once it is in the trade body. Zimbabwe will also contribute counterpart funds of $5 million,” Chinamasa added.

The country is saddled with an external debt of nearly $10 billion and owes the IMF $124 million in arrears accrued since 2000 and another $1 billion owed to the WB.

Economic experts say financial institutions including the WB and AfDB are barred by law from extending loans to Zimbabwe because of outstanding debts.

The IMF is on record stating Zimbabwe will only get funding from the multilateral lender after three years.

Zimbabwe is, however, set to meet up with multilateral creditors at the next meeting of the IMF and the World Bank (WB) scheduled next month in Lima, Peru where the country’s $1,8 billion arrears will be the main agenda for deliberation at the meetings as the country crafts repayment mechanisms.

Comments (4)

SADLY THESE ARE MORE D.N. LIES

Nico Kuipa - 20 September 2015

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