Zim hammers out debt clearance deal• Move to unlock further credit lines • Chinamasa, creditors meet

Minister Chinamasa

Minister Chinamasa

Takunda Maodza Assistant News Editor
ZIMBABWE has agreed a deal with international financial institutions to settle its arrears by April next year in a move that is expected to unlock further lines of credit.

Finance and Economic Development Minister Patrick Chinamasa confirmed the development yesterday following a meeting with creditors on Thursday in Lima, Peru.

The Zimbabwe delegation, led by Minister Chinamasa, met the country’s creditors on the sidelines of the 2015 World Bank and International Monetary Fund annual meeting.

The meeting convened by the three international financial institutions, namely the African Development Bank, the World Bank Group and the IMF started on Thursday and ends on Monday.

Minister Chinamasa said the strategy for clearing the country’s external payment arrears was developed by a committee constituted by Government in April 2015.

The meeting was chaired by Reserve Bank of Zimbabwe Governor Dr John Mangudya and included the Ministry of Finance and the international financial institutions.

“Prior to the Lima meeting, a Government delegation led by the Chair of the Committee Dr Mangudya visited some European capitals over 21-25 September 2015, to meet with some of the country’s creditors, covering Rome, Brussels, Berlin and Paris,” said Minister Chinamasa.

He said the objective of the visit was to share with the creditors Zimbabwe’s strategy to clear its arrears to the three IFIs.

The Thursday Lima meeting that discussed Government’s strategy of clearing Zimbabwe’s arrears was attended by representatives of all multilateral and bilateral creditors.

“The strategy that was presented by Government entails clearing Zimbabwe’s external payment arrears with the IFIs through a combination of using the country’s own resources, arrangement of Bridge finance with regional and international banks, and the usage of bilateral loan facilities,” said Minister Chinamasa.

He added: “The strategy involves clearing the arrears to the three multinational institutions; namely the IMF ($110 million), the World Bank ($1.15 billion) and the AfDB ($601 million) by the end of April 2016.”

The strategy also entails development of a new Comprehensive Country Financing Programme supported by the AfDB, IMF and World Bank, that attracts long term financing to promote growth and debt sustainability.

“Engagement of the European Investment Bank, the Paris Club and non Paris Club bilateral creditors for debt resolution, on the strength of our performance under the above programme,” said Minister Chinamasa.

He said the strategy was anchored on the 10 Point Plan Economic Reform Agenda enunciated by President Mugabe in August.

“Hence, the roadmap to clear arrears to IFIs by end of April 2016 allows for time for the IFIs to develop a new financing programme for Zimbabwe.

“Clearance of external payment arrears to the IFIs would also lead to the re-engagement with both the Paris and non Paris Club creditors. I am pleased to report that there was strong endorsement among creditors to support Zimbabwe’s strategy to clear the arrears to the three IFIs as the preferred creditors,” added Minister Chinamasa.

He described the Lima talks as “quiet healthy and productive in supporting Zimbabwe’s efforts towards rapid economic development and transformation”.

“I would like, therefore, to express Government’s great appreciation to the World Bank, IMF and the AfDB for arranging the fruitful re-engagement meeting, and also to thank the quadripartite External Arrears Clearance Committee for the development of a sustainable strategy for the clearance of external arrears,” said Minister Chinamasa.

The country owes external creditors close to $10 billion.