HARARE: Zimbabwe is seeking a strategy to clear the total $1.8 billion in arrears it owes the African Development Bank (AfDB), International Monetary Fund (IMF) and the World Bank—a move that would allow the country to access capital from the three financial institutions.
Speaking at a press conference Tuesday, Finance minister Patrick Chinamasa said the options that the country will pursue to clear the arrears were to be ascertained as it was too early and depended on the goodwill of creditors.
“We are looking at a strategy to clear the $1.8 billion arrears.When we do so, this opens up engagement with the Paris Club, mostly creditors from the Western countries.”
The country owes both internal and external creditors $8.4 billion. Chinamasa said the country needed to get out of the arrears to enjoy benefits of membership of the IMF. Chinamasa said the country has so far met the quantitative and structural targets but the IMF review team will determine whether Zimbabwe’s assessment was correct.
“We are working out a strategy to meet all creditors — multilateral, Paris Club and bilateral — and also seek attendance of key decision-makers so that we will be able to clear our debts and we will be able to access [the] capital,” he said.
Chinamasa said the country has demonstrated strong political will in the current position as it met its Staff-Monitored Programme targets first review in December 2014. “As far as political will is concerned we have got it. The issue of funding you have to look at it as a step by step process and the first step is engagement,” he said.
IMF alternate executive director African Group 1 Chileshe Mpundu Kapwepwe, who is in the country for the first time to get first-hand information on the economic performance of Zimbabwe, said her role was to articulate the country’s position on the IMF board. She said the country will have sideline meetings at the annual World Bank meetings in Lima, Peru, next month. She said most countries including Zimbabwe are facing a decline in commodity prices due to the challenges in China.
Kapwepwe said the revenue side was also declining due to the impact of drought and the under-performance of the manufacturing industry urging African countries to diversify in commodities.
Zimbabwe has set up a committee chaired by Reserve Bank governor John Mangudya to resolve the debt crisis. Other members of the committee are drawn from AfDB, World Bank and IMF. The committee will produce a paper that would be presented during the IMF/World Bank annual meeting in Lima next month.
