Govt clinches US$1 billion deal

Source: Govt clinches US$1 billion deal – Sunday News Jul 17, 2016

Harare Bureau
THE African Export-Import Bank and Lazard — a New York Stock Exchange-listed financier — will mobilise US$1,1 billion to help Zimbabwe clear its arrears with the World Bank and secure new funding. 

The Government and Britain are also working on mending relations after Harare explained to London that Zimbabwe’s gripe was solely with former British Prime Minister Mr Tony Blair. Zimbabwe owes external creditors US$10 billion, with arrears to the World Bank, African Development Bank and IMF at US$1,15 billion, US$600 million and US$110 million respectively.

The three global financiers want Zimbabwe to settle these arrears as a pre-condition for fresh capital. The new deal negotiated by Finance and Economic Development Minister Patrick Chinamasa during his Europe tour two weeks ago will leave Zimbabwe with the less burdensome AfDB and IMF arrears to clear.

Minister Chinamasa told our Harare Bureau, “. . . we had marathon meetings with the Afreximbank and Lazard, an international bank. The discussions centred on the strategy which they have committed to putting together for us on the arrears due to the World Bank. They have put together a syndication of banks to address the World Bank arrears. With this understanding and commitment from Afreximbank and Lazard, we are now definitely on course to fulfilling what we set out in our arrears clearance strategy. I can safely say that everything is now on course.”

Reserve Bank of Zimbabwe Governor Dr John Mangudya, who attended the meetings, chipped in saying: “What is now happening is that Lazard and Afreximbank will mobilise the funds from the international financial markets for Zimbabwe. The plan is that we should have raised the money to clear our arrears to the World Bank by September before the boards of AfDB and the World Bank meet.”

Minister Chinamasa said he held discussions with Britain’s minister for African affairs Mr James Duddridge, and the two agreed to enhance Harare-London engagement.

“I had a meeting at the Foreign and Commonwealth Office with Minister James Duddridge, and we had a very constructive meeting and both agreed that we have to work hard for Zimbabwe and the UK towards normalisation of Zim-UK bilateral relations in order to leverage on the economic potential between our two countries for our mutual benefit.

“In my participation at the Chatham Roundtable Meeting and also in my meeting with Mr Duddridge, I underscored the point that Zimbabwe has no quarrel with the British monarchy, no quarrel with the British people and no quarrel with the Conservative Party and that our sole quarrel is with (former British Prime Minister) Tony Blair and Claire Short for misleading the British people on the nature of the dispute between Zimbabwe and the UK.

“I also emphasised that we need to settle outstanding issues arising from the decolonisation process, in particular, land compensation. In Brussels, I had a meeting with the European Union Department of Development. (Some time ago) we signed a US$230 million deal for the support of sectors such as education, health and agriculture. The discussions also centred on disbursement of that US$230 million grant.

“While there, I also visited the European Investment Bank which has its headquarters in Brussels. We owe the European Investment Bank about US$280 million; so we discussed a payment plan. I emphasised, in our meeting, that the bank should resume support to Zimbabwe’s private sector because the public sector rides on the back of the private sector. It is the private sector that pays taxes which anchor the public. I also took the opportunity to thank them for the lines of credit they have provided for some of our commercial banks. I asked them to increase the lines of credit through the commercial banks.”

In France, Minister Chinamasa met his French counterpart, Mr Michel Sapin, with Paris pledging to support Zimbabwe’s debt clearance strategy. He also engaged potential investors with several financiers expressing interest in Zimbabwe. Zimbabwe’s debt clearance strategy entails settling IMF arrears via Special Drawing Rights valued at about US$130 million. A bridging loan will take care of AfDB dues.