Source: Zim debt plan gets key backer | The Sunday Mail May 29, 2016
The African Development Bank will back Zimbabwe’s external debt clearance plan when its board, the IMF and World Bank jointly review the country’s strategy in September, a Cabinet minister has said.
AfDB has also advised Harare to draw up a programme under which the three multi-lateral lending institutions will fund key economic growth enablers if the strategy is adopted.
A committee chaired by Reserve Bank of Zimbabwe Governor Dr John Mangudya and comprising AfDB, IMF and World Bank country representatives is already working on that programme.
Zimbabwe’s external debt is US$10,8 billion, with Government accounting for US$6,8 billion.
The debt excludes the country from global financial packages, compelling it to rely more on cash transactions for capital projects.
On May 18, 2016, Finance Minister Patrick Chinamasa and Dr Mangudya met AfDB president Dr Akinwumi Adesina in Cote d’Ivoire to aprise him on Zimbabwe’s debt clearance strategy first presented at a global finance meeting in Peru last year.
In an interview with The Sunday Mail, Minister Chinamasa said, “We went to Abidjan, Ivory Coast to firm up our debt clearance strategy and get commitment from the AfDB that they will support us.
“The meeting went on well; we got renewed support and encouragement that we will have their (AfDB) backing when we present our case to the three multi-lateral institutions. The board members of these institutions are expected to sit in September to determine whether or not to accept Zimbabwe’s strategy.
“The rules of this game state that if a member is in arrears, it cannot enjoy benefits. These institutions cannot make investments in members that are in arrears.”
Minister Chinamasa said Dr Mangudya’s committee was drafting a country financing programme, with priority going to agriculture and manufacturing.
“That quadripartite committee is working to identify key sectors of the economy that, if supported, can trigger economic transformation.
“Agriculture is at the top of our heads, while enabling infrastructure development like power supply lines, road, rail and water piping will also be taken into account. Recapitalising and retooling of the manufacturing industry, and credits to SMEs are important elements that will feed into that framework.”