Zim working on plans to clear debts

ZIMBABWE is working on the payment of arrears to three preferred creditors following the holding of meetings with executives from the institutions.

Source: Zim working on plans to clear debts – The Standard May 22, 2016

BY VICTORIA MTOMBA

The country owes the three preferred creditors — the African Development Bank (AfDB), International Monetary Fund (IMF) and World Bank (WB) — $1,8 billion and last year presented a plan in Lima, Peru to clear the arrears by June 30.

In an interview on Friday, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said during his meetings in Kigali (Rwanda) and Abidjan (Ivory Coast), he met the deputy managing director for the IMF, David Lipton and World Bank vice-president Africa Region Markhtar Diop and discussed the roadmap for arrears clearance and the post arrears clearance programme.

Mangudya chairs the debt clearance strategy committee, which also has representatives from AfDB, IMF and World Bank.

“We are now talking about the steps to pay the arrears, term sheets of funding and source of funding for the clearance of arrears. We are now saying the true colours of that money to pave way for final preparations,” he said.

Mangudya said there was need for a plan of action and conformity on principles of International Financial Institutions standards before the arrears were cleared.

The IMF released a statement early this month stating that the country should pay $78,7 million for the Poverty Reduction Growth Trust (PRGT) from the Special Drawing rights. IMF said if Zimbabwe cleared the PRGT, it would move to the next stage and would be cleared from the remedial measures. It said Zimbabwe would be reinstated on the list of PRGT-eligible countries.

Recently, Finance minister Patrick Chinamasa, Mangudya and African Development Bank president Akinwumi Adesina met at the bank’s offices in Abidjan where Zimbabwe provided an update on the progress made in view of the upcoming meeting in Lusaka on May 27 on the margins of the AfDB annual meetings.

During the meeting, Chinamasa stressed the importance of a timeline in concluding the process with the international financial institutions in order to consolidate the gains made on the reforms.

“The meeting took note of the progress made with the IMF Staff monitored Programme, particularly in the areas of fiscal consolidation, financial governance, economic and land reforms, as well as the positive outcomes of its board consultation on May 2 2016. The meeting also discussed the recent policy measures put in place by the monetary authorities to curb capital flight from Zimbabwe and measures to promote production and exports in view of the global external factors of declining commodity prices and the strong US$.”

During the meeting, Adesina said the measures put in place by the authorities were critical as the country was completing its re-engagement process.

According to a AfDB statement, the meeting noted the convergence between the priorities of the AfDB’s High 5s and the areas of focus of Zimbabwe’s post-arrears clearance programme.

AfDB’s high 5 areas are light up and power Africa, feed Africa, integrate Africa, industrialise Africa, and improve the quality of life for the people of Africa.

Adesina reassured Chinamasa that AfDB would continue to support the country, through its private sector window, in providing energy, feeding the population, rehabilitating the infrastructure and reviving the industry, because Zimbabwe was key to the region.