Source: Parly hails debt engagement breakthrough – herald
Farirai Machivenyika
Senior Reporter
ZIMBABWE’s drive to clear its longstanding arrears, resolve its debt and reopen access to international finance has received a major vote of confidence from Parliament following the decision by the United Kingdom and France to co-chair the country’s new Debt Consultative Group (DCG).
The development is being viewed as a significant dividend of the Second Republic’s engagement and re-engagement policy, as Harare steps up efforts to resolve its US$2,7 billion in arrears and rebuild relations with international financial institutions and development partners.
The DCG, established under the Structured Dialogue Platform, is expected to help guide the country’s debt restructuring process while supporting the implementation of the International Monetary Fund’s Staff-Monitored Programme.
Its work could ultimately help create conditions for Harare to regain access to international financing on more sustainable terms, while strengthening investor confidence in the country’s economic reform programme.
The development was raised in Parliament last week as a point of national interest by Chivi Central legislator Mr Xevia Maoneke, who said the involvement of two major Western economies demonstrated the progress being made through the Government’s diplomatic re-engagement drive.
“This development is not merely administrative; it is a profound testament to the efficacy of this Government’s engagement and re-engagement’ policy,” he said.
“For years, the burden of our external debt hindered our ability to access affordable international credit and stifled our potential for rapid economic expansion.
“The willingness of the UK and France — two major global economies — to steer the committee responsible for restructuring our debt sends an unequivocal message to the international community. It signifies restored confidence.”
Cde Maoneke added that by co-chairing this process, the UK and France have signalled a renewed willingness to work alongside Zimbabwe in resolving longstanding arrears, effectively endorsing the country’s commitment to structural economic reforms.
Zimbabwe’s debt overhang has for years constrained its ability to access affordable international capital, with arrears to multilateral and bilateral creditors remaining a major obstacle to securing new financing.
However, the Government has been pursuing a structured debt resolution process while implementing economic reforms aimed at restoring macro-economic stability and creating a
more predictable investment environment.
Cde Maoneke said the latest development showed that Zimbabwe’s diplomatic efforts were beginning to produce tangible economic benefits.
“Moving from isolation to collaborative dialogue with key Western partners is a critical achievement that strengthens our standing in the global arena.
“Mr Speaker Sir, the benefits of this new development by the UK and France cannot be overstated. If
you think of improved debt sustainability, with the guidance of such experienced international stakeholders, we are in better positions to formulate a credible sustainable and phased road map to address our external debt obligations.
“Think of enhanced investment climate. International investors look for stability and clear pathways for fiscal management.
“Having the UK and France intimately involved in our debt resolution framework acts as a seal of approval which will help de-risk the Zimbabwean market,” he said.
The participation of the UK and France in the debt resolution process comes as the Second Republic seeks to normalise the country’s relations with international partners and unlock opportunities for investment, trade and development financing.
Successful resolution of the debt question would also strengthen the country’s capacity to mobilise long-term capital for infrastructure, industry and other productive sectors required to accelerate economic growth towards Vision 2030.
It would further complement ongoing efforts to improve the country’s creditworthiness and restore confidence among international investors and financial institutions.
Speaker of the National Assembly Advocate Jacob Mudenda said the latest developments provided grounds for optimism over the resolution of the country’s debt challenges.
“Yes, there is hope at the end of the tunnel regarding our international and domestic debt,” he said.
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