GOVERNMENT is set to receive a grant from the African Development Bank (AfDB) to clear its arrears to the bank, International Monetary Fund (IMF) and the World Bank.
BY TARISAI MANDIZHA
This will be a major breakthrough for Zimbabwe, which has to clear $1,8 billion arrears to the three institutions to start accessing cheap loans to revive the economy.
Speaking at a media briefing in Harare yesterday, AfDB director Sibry Tapsoba, who is the head of a 12-member delegation currently in the country, said the financial institution had set aside some funds to assist Zimbabwe to clear its arrears. He said the amount was yet to be agreed as it required approval from the Abidjan-headquartered AfDB, “but at this point and time we have just reassured the [Finance] minister [Patrick Chinamasa] we have the resources available”.
“The total amount of arrears for Zimbabwe to AfDB is $601 million and the resources that we are putting aside will clear the AfDB arrears, but we must clear the arrears of IMF and the World Bank,” Tapsoba said.
He said Zimbabwe had to re-engage the international community, a move which would unlock the potential of the country to attract foreign investment and provide more confidence within the international community that Zimbabwe was ready for business.
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“We are also very happy with the papers and the documents that we have been receiving from the government having to do with the reason why we are here. In that respect, I think we are being reassured by the government by providing the strategies for arrears clearance and I think it’s a step in the right direction,” he said.
Chinamasa said Zimbabwe should make every effort to ensure that the country will be able to utilise the AfDB resources which have been set aside until the end of December 2016.
“One of the strategies is that AfDB has set aside some funds to assist Zimbabwe in clearing its arrears, the amount is yet to be determined by their board, but they have assured us that those funds which have been set aside to assist Zimbabwe in clearing its arrears will be available for us until end of December 2016. Otherwise if we don’t utilise them between now and December next year . . . they will need to go into the market again to mobilise new resources assuming this will take more time,” he said.
Chinamasa said his ministry had briefed the AfDB team on Zimbabwe’s debt arrears strategy. He said the first step in the strategy was to clear the arrears to the multilateral financial institutions.
“We have taken the opportunity to brief them on that strategy as well as to brief them on our informal agenda that we have been implementing during the past two years,” he said.
Zimbabwe is re-engaging creditors in a bid to normalise relations. Zimbabwe’s public and publicly-guaranteed debt stood at $8,4 billion as at end June 2015.
Reserve Bank governor John Mangudya is set to visit three European capitals to garner support for the country’s debt strategy ahead of the IMF/World Bank annual meetings in Lima, Peru, next month. The strategy will be tabled before the preferred status creditors.