Zimbabwe News and Internet Radio

Zimbabwe crafts debt repayment plan

By Ndakaziva Majaka

HARARE – Finance minister Patrick Chinamasa says Zimbabwe has come up with a strategy to settle its nearly $10 billion debt, with multilateral lenders being paid first as they are owed the most.

Patrick Chinamasa
Minister without Finance Patrick Chinamasa

The Treasury boss told Britain’s Department for International Development (DFID) permanent secretary Mark Lowcock last week that the strategy was meant to restore confidence in the country and attract foreign direct investment (FDI).

“It is a very simple method that shows we are willing to honour our obligations, we will address multilateral institutions like the International Monetary Fund (IMF) first then in phase two we will start engaging lenders like the Paris Club and at this stage we trust the World Bank (WB) and IMF will mediate for us,” he said.

While Chinamasa did not disclose the exact amount the country owes bilateral lenders, he said “it is a significant amount enough to make most of them sceptical of investing at the moment”.

He, however, urged the lenders to bail out the private sector as it was in “dire need of capital”.

“The private sector should not be punished because of government arrears, investment must still come so that the private sector benefits, we are spearheading the clearance of various obligations owed so this shows commitment thus the private sector must now start getting reasonable investments,” Chinamasa said.

Zimbabwe is saddled by domestic and foreign debt of about $10 billion. It owes the IMF $124 million in

arrears accrued since 2000 and another $1 billion is due to the WB.

Economic experts say lending institutions, including the WB and African Development Bank, are barred by law from extending any further loans to Zimbabwe because of outstanding debts.

Last year, IMF head of mission to Zimbabwe Dominique Fanezzi said while the country was not going to get debt relief from multilateral institutions, there was room for flexible payment plans and terms. Daily News