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Minister Chinamasa

Business Reporter
THE African Development Bank has set aside a grant to help Zimbabwe clear its arrears with the continental bank, a development which will put Zimbabwe in good stead to push for debt relief with multilateral and other bilateral creditors.

Zimbabwe’s total arrears to the AfDB are $601 million.

“The amount (grant set aside) is yet to be determined by the (AfDB) board. 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 December 2016,” Finance and Economic Development Minister Patrick Chinamasa said yesterday.

He was addressing a joint Press conference with Mr Sibry Tapsoda, the head of the AfDB mission in the country to assist with the strategy for debt clearance.

Minister Chinamasa said the AfDB funds are available until December 2016 and Government is making efforts to access the grant and clear the arrears by end of this year.

“Otherwise if we don’t utilise them between now and December next year the funds will disappear and they will need to go into the market again to mobilise new resources, something that would take more time.

“We must make every effort to ensure that we are able to utilise those funds by end of December next year,” said Minister Chinamasa.

“So we are in hurry as a country and in fact our hope is that if the strategy is accepted we hope that we should clear the arrears to the AfDB by December this year. There are also other strategies that we are going to employ to make that happen by December,” he said.

The AfDB has accepted Government’s request to play a leading role in the debt resolution strategy. AfDB head of mission Mr Tapsoda said the bank is committed to assisting Zimbabwe with its debt strategy and re-engagement with the international community.

“We want to reassure Zimbabwe of the commitment of the AfDB to continue assisting the country in clearing its arrears. The level of resources that will be put in this co-operation will be decided when we return to Abidjan.

But at this point in time we have just reassured the minister that we have the resources available to do so,” said Mr Tapsoda.

As part of the strategy, Government is dispatching a team to key European capitals to present its plan on dealing with debt arrears to the Paris Club creditors as the International Monetary Fund commends the Government’s commitment to re-engagement with international financiers.

The team, which is led by Reserve Bank of Zimbabwe Governor Dr John Mangudya, will visit Paris in France, Brussels in Belgium and Berlin in Germany before the end of this month.

The team is expected to lobby for buy-in on debt arrears ahead of the Bretton Woods institutions’ annual meetings scheduled for Lima next month.

As at the end of June, Zimbabwe’s public and publicly guaranteed debt stood at $8,4 billion.

This comprises external debt of $6,7 billion, representing about 47 percent of GDP, and domestic debt of $1,7 billion.

Zimbabwe owes bilateral creditors $3,5 billion including arrears, Paris Club $2,8 billion, non-Paris Club $709 million, multilateral creditors $2,57 billion while the RBZ owes external creditors $587 million. The debt situation has affected Zimbabwe’s chances to access new capital for infrastructural development.