ZIMBABWE’S public debt has increased to $11,2 billion as at October 31, further worsening the country’s relations with its international creditors.
BY VICTORIA MTOMBA
As at September last year, the total public and publicly guaranteed debt, including arrears, was estimated at $8,36bn, of which $1,29bn was domestic debt, with $7,07bn being external.
According to statistics from Treasury, the debt as at October 31 was equivalent to 79% of the gross domestic product (GDP).
“As at October 31, 2016, Zimbabwe’s public debt stood at $11,2 billion or 79% of GDP, of which $7,5 billion, 53% of GDP, is external debt. Of the $7,5 billion external debt, $5,2 billion is in arrears, and this has resulted in deterioration of relations with major creditors, thereby, inhibiting access to finance,” Finance minister Patrick Chinamasa said in his 2017 National Budget statement.
Chinamasa said his 2017 National Budget contained debt sustainability measures to overcome Zimbabwe’s external indebtedness, as well as containing growth in public domestic debt, including contingent liabilities of quasi government institutions.
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He said the resolution to the country’s external payment arrears should overcome further growth, particularly on account of penalties on accumulated arrears and open up access to new financing.
The Finance minister said the country would resolve its arrears to other multilateral creditors at the beginning of next year.
“The next step is resolving, early in 2017, arrears to the other multilateral creditors, for instance the African Development Bank, $610m; the World Bank, $1,16bn; the European Investment Bank, $212m; and other multilateral institutions, as well as bilateral official creditors,” he said.
Zimbabwe had planned to clear $1,8 billion arrears to the preferred creditors that include the African Development Bank, World Bank and International Monetary Fund (IMF) in a move to access fresh capital from international financial institutions.
It has so far settled its obligations to IMF amounting to $107,9m.
The repayment was done on October 20, resulting in the IMF removing sanctions related to remedial measures applied on account of overdue financial obligations to the Poverty Reduction and Growth Trust.
Chinamasa said the clearance of arrears would allow access to concessional development finance, as well as investment flows and also assist in the implementation of the Interim Poverty Reduction Strategy Paper for 2016-2018.