Chinamasa demands EIB sets up Zim office

via Chinamasa demands EIB sets up Zim office – DailyNews Live 20 February 2015 by Ndakaziva Majaka

HARARE – Finance minister Patrick Chinamasa says the European Investment Bank (EIB) should set up office in Zimbabwe, a move he believes is a sign of confidence as the two work towards normalising relations.

Heavily indebted Zimbabwe — saddled by nearly $10 billion in domestic and foreign obligations — is currently making token payments to EIB, with Chinamasa claiming that a “sizable amount had been paid in January this year”.

“We expect rational economic behaviour on both sides, we have begun working on our debt to the EIB and we want the EIB back in Zimbabwe,” the Treasury chief said earlier this week.

While he did not disclose how much Harare had so far paid the European lender, Chinamasa said the amount was “enough to build confidence with the institution.”

He added that he will discuss productive sector financing with an EIB delegation expected in the country sometime this year.

Meanwhile, Zimbabwe has also been making part payments to the World Bank (WB), International Monetary Fund (IMF) and the African Development Bank (AfDB).

In his 2015 national budget, Chinamasa said the total debt comprised external dues amounting to $7,2 million and domestic arrears of about

$1,1 million. He noted that government prioritised the repayment of various amounts owed to the institutions as the country needed the financial help they had to offer.

“…we have made the repayment priority because we need financial boosts and this is one of the ways to get the needed aid,” Chinamasa said.

The country, which has not been servicing external debt since 1998, is making efforts to engage all the multilateral institutions owed.

Last year, Chinamasa said the country was “going to start a conversation on the available options on the clearance of arrears..

“We are going to rely on their technical assistance, co-operation and support. This country needs fresh money. What has been inhibiting access to capital markets is basically that we are in arrears,” he said then.

He noted that the multi-lateral financiers usually set the tone on how other investors respond to investment opportunities coupled with country risk.