Zim, IMF agree on debt repayment plan

HARARE - Zimbabwe and its creditors this week agreed on an arrears repayment strategy which entails the clearance of the country’s $1,8 billion outstanding amount by April 2016, Finance minister Patrick Chinamasa has said.

The Treasury chief on Thursday said the strategy was for Zimbabwe’s three preferred creditors — the International Monetary Fund (IMF), World Bank (WB) and the African Development Bank (AfDB) — and had been passed at the IMF/World Bank annual meetings in Lima, Peru.

“The strategy that was presented by Government entails clearing Zimbabwe’s external payment arrears with the International Finance Institutions (IFIs) through a combination of using the country’s own resources, arrangement of bridge finance with regional and international banks, and the usage of bilateral loan facilities,” he said.

Chinamasa also said the plan involved clearing the arrears to the three multinational institutions as the IMF is owed $110 million, the WB $1,15 billion and the AfDB $601 million by the end of April 2016.

“The plan also involves development of a new Comprehensive Country Financing Programme supported by the AfDB, the IMF and the World Bank, that attracts long-term financing to promote growth and debt sustainability; and Engagement of the European Investment Bank (EIB), the Paris Club and non-Paris Club bilateral creditors for debt resolution, on the strength of our performance under the above programme,” he said.

The minister also said the road map to clear arrears to the IFIs allowed for time for the financiers to develop a new financing programme for Zimbabwe.

The strategy that was presented by government was developed by a committee constituted by government in April 2015 chaired by the governor of the Reserve Bank of Zimbabwe John Mangudya with participation of the ministry of Finance and the three preferred creditor’s representatives in the country.

Prior to the Lima meeting, a government delegation led by the chair of the committee, Mangudya, visited some European capitals over September 21-25, 2015, to meet with some of the country’s creditors, covering Rome, Brussels, Berlin and Paris.

“The objective of the visit was to share with the creditors our Strategy to clear Zimbabwe’s arrears to the three creditors,” Chinamasa said.

The country is saddled with an external debt of nearly $10 billion and economic experts say financial institutions are barred by law from extending loans to Zimbabwe because of outstanding debts.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.