Zim to renegotiate IMF, WB debt

HARARE - Zimbabwe is set to meet with multilateral creditors next month at the International Monetary Fund (IMF) and the World Bank (WB) conventions in Lima, Peru, to renegotiate the country’s external debt, a Cabinet minister said.

Finance minister Patrick Chinamasa yesterday told journalists in the capital that the meetings were specifically set up for Zimbabwe to table its payment plan of $1,8 billion arrears to the Bretton Woods institutions.

“It was agreed at the spring meetings that the Lima meeting was going to be the platform to engage with major decision makers and decide on how we will settle our arrears, not the debt, but the arrears,” Chinamasa said.

However, the Treasury chief said he was not in a position to give a timeline for settling the arrears as he said the decision was up to the lenders.

“Yes, the issue of the $1,8 billion and how it will be settled is a major issue but it is still too early for us to determine that as it is entirely up to the goodwill of the creditors. If goodwill is forthcoming the process will be smooth and shorter,” he said.

This comes as IMF African Group 1 Constituency executive director Chileshe Kapwepwe is in the country to get updates from Chinamasa on the state of affairs in Zimbabwe.

According to Chinamasa, Kapwepwe will mediate on behalf of Zimbabwe at the upcoming meeting of the group of African ministers of Finance and governors of African central banks, affiliated with the IMF and the World Bank.

“She is here in the country so that I can give her an up-to-date picture on our situation, both the negative and positive…she articulates our position on the board of the IMF,” Chinamasa said.

Kapwepwe represents a constituency of 23 African countries including Zimbabwe.

“It is a very simple method that shows we are willing to honour our obligations, we will address multilateral institutions like the IMF first then in phase two we will start engaging lenders like the Paris Club and at this stage we trust the WB and IMF will mediate for us,” he added.

Zimbabwe is saddled with an external debt of nearly $10 billion and owes the IMF $124 million in arrears accrued since 2000, another $1 billion owed to the WB.

Economic experts say financial institutions including the WB and African Development Bank are barred by law from extending loans to Zimbabwe because of outstanding debts.

Presently, an IMF team is in the country to undertake the second review of the Staff Monitored Programme (SMP), an appraisal of progress that the country has made under the SMP (October 2014 — December 2015). The latest visit seeks to facilitate a platform for the IMF to engage the government and the central bank on issues affecting the economy.

 

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