Source: Zim to clear US$605m debt | The Herald June 12, 2019
Sydney Kawadza in MALABO, Equatorial Guinea and Africa Moyo in HARARE
Zimbabwe is on course to clear its US$605 million debt with the African Development Bank (AfDB), which will allow the country to start accessing funds from the bank early next year, Finance and Economic Development Minister Professor Mthuli Ncube has said.
In an interview on the sidelines of the ongoing 54th Meeting of Boards of Governors of the AfDB and the 45th Annual Meeting of the African Development Fund here, Prof Ncube said the country was complying with requirements that will pave way for it to access funds.
“We are expecting it (funding) end of January or February next year because the roadmap requires Staff Monitored Programmes from the International Monetary Fund (IMF) and we signed up to go through test dates and the last test date is in December or January next year and at that moment, if all goes well, will finally access the monies,” said Prof Ncube.
Last week, the AfDB board approved the Zimbabwe Country Brief, which provides a programming document for the bank to continue its engagement with Harare regarding the arrears.
Prof Ncube said approval of the Zimbabwe Country Brief, “is another milestone towards the debt arrears clearance strategy”.
Recently, the IMF commended Government for tightening the stance and introducing a softer currency, the RTGS dollar, as part of a raft of reforms under the Transitional Stabilisation Programme (TSP).
The IMF conceded that “significant economic reforms”, which include a spirited fight against corruption in procurement, State-owned Enterprises (SOEs) reforms and promoting private sector investment through improving the business climate were in full swing as the country gears to achieve macroeconomic stability.
Government has since requested an SMP covering the period May 15, 2019 to March 15, 2020, and IMF has supported the move, which will help authorities to implement key reforms outlined in the TSP, and “help Zimbabwe build a track record of sound economic policies as it seeks to normalise relations with external creditors”.
Zimbabwe and the AfDB have been in talks over debt clearance. Government is considering a bridge finance whereby the AfDB, under the Arrears Clearance Window (Pillar II) of the Fragile States Facility or their Transition Stabilisation Facility, gives Harare a grant of about US$500 million to settle the debt.
That would mean Zimbabwe’s net payment will be around US$120 million.
Yesterday, Prof Ncube also said it was time Zimbabwe returned to be a “normal” economy.
“Zimbabwe does not deserve to be where it is. There are normal countries here (at the AfDB meeting) so why can’t we be normal?” he queried.
Prof Ncube said guided by the TSP, Zimbabwe will witness economic growth from next year, and implored citizens to be patient.
“My message to the people of Zimbabwe is that; please be patient. “We cannot have a silver bullet with these things, the positive impact of the reforms takes time and we are in the right path and again we should be patient,” he said.
The AfDB annual meetings bring together about 3 000 delegates and are being held under the theme, “Regional Integration for Africa’s Economic Prosperity”.
The meetings provide a unique forum for representatives of governments, businesses, civil society, think-tanks, academia and the media from across the glove, to dialogue on key issues concerning Africa’s development.
The theme is one of the Bank’s five strategic priorities.
The meeting’s calendar of events includes a High-Level Presidential Dialogue on, “Boosting Africa’s Economic Integration”.
There will also be a special presentation of the Bank’s flagship African Economic Outlook publication for 2019, released in January this year.
Prof Ncube said regional integration was a key pillar for achieving prosperity for countries within the region following the ratification of the African Continental Free Trade Area (AfCTA) by 52 countries ahead of its launch next month.
He said Zimbabwe was looking for an opportunity to attract funding on regional projects such as the Batoka Gorge hydro-electricity project.
“We have to look for more projects in Botswana, South Africa, Mozambique and Malawi so we can benefit from these regionalisation pillars that the bank is pushing,” he said.
Prof Ncube took advantage of the meeting to engage other organisations and countries including a United States delegation, Germany, South Africa, on various economic issues including arrears clearance.
He also delivered a governors’ speech where he outlined the need for the revival of the Zimbabwe Fund.
“Once it expires in October, it needs to be revived, revitalised so I will be pushing for it. We have to push for the retention that the US$500 million hence the need to clear our arrears with the African (Development) Bank,” said Prof Ncube.