Zim gets it right on debt clearance plan
ONGOING engagements over debt clearance spearheaded by President Mnangagwa are likely to bear fruit as the country has adopted robust economic reforms and was compensating white former commercial farmers in fulfilment of creditors expectation.
Through the Structured Dialogue Platform, where Zimbabwe engages its debtors on the arrears clearance and debt resolution process — the country has roped in African Development Bank Group (ADB) led by its president Dr Akinwumi Adesina and former Mozambican President Hon Joachim Chissano, as high-level facilitators of the engagements.
Zimbabwe has come up with a compensation package with former commercial farmers for improvements made on the land, under the Global Compensation Deed and through National Development Strategy 1 (NDS1), the country has made bold economic reforms that are manifest in growing GDP, sustained food security and the stabilisation of prices.
These bold steps have been noted even by some of the country’s most strident critics who reckon that President Mnangagwa has the mettle and resolve to settle the debts and as has already been demonstrated —through pragmatic initiatives—chart a new path.
Earlier this week, the EU expressed willingness to work with Zimbabwe on the debt clearance journey.
“The EU welcomes the recent launch of the dialogue platform related to arrears clearance and debt resolution process and looks forward to tangible progress in this process.
“Furthermore, the EU welcomes Zimbabwe’s engagement on the Universal Periodic Review process,” read the statement in part.
Organisations like Zimbabwe Coalition on Debt and Development (ZIMCODD) also noted the fact that the country has roped in Dr Adesina as the debt champion among others, and former Mozambican President Joachim Chisanno as the facilitator is demonstrative of the Harare administration to settle its debts and a major breakaway from the pre-Second Republic era where initiatives such as 2015 Lima Process, the 2012 Zimbabwe Accelerated Arrears Clearance Debt and Development Strategy (ZAADS), the 2010 Sustainable and Holistic Debt Strategy, and the 2001-2008 Domestic Debt Restructuring.
“The intuition behind this position is the inclusion of former Mozambique President, Joaquim Chissano, a statesman, seasoned politician, and diplomat.
“This is crucial in cultivating political will to implement reforms. Adding clout to the process is the roping in of AfDB Chief, Dr Adesina; an economist and banker; as Zimbabwe’s debt champion. Dr Adesina fully understands the demands of instituting economic and institutional reforms.
“Also, by virtue of being part of Zimbabwe’s major creditors, the AfDB chief will be key in negotiating debt relief including the possibility of suspension of sanctions which is key in reducing Zimbabwe’s investment risk premium thereby significantly improving capacity for debt servicing . . . this time, it is likely that the ongoing dialogue processes will bring positive results,” ZIMCODD said in its weekly publication.
Noting that Zimbabwe has already met the demands of the majority of creditors such as macroeconomic stabilisation and compensation of white farmers for improvements on land — ZIMCODD said the debt clearance platform will pave way “for increased agricultural production and productivity through reduced reliance on state subsidies and increased farmers’ access to finance . . . the initiation of these discussions is a move in the right direction which has the potential to bring a lasting solution to Zimbabwe’s decades long debt distress”.