Zim fails to meet $1,8b debt deadline

Source: Zim fails to meet $1,8b debt deadline – Newzimbabwe 14/07/2016

ZIMBABWE failed to repay $1.8 billion to the International Monetary Fund, the World Bank and African Development Bank by its own June 30 deadline.

“Right now, we’ve not paid anything,” John Mangudya, Zimbabwe’s central bank governor, said on Thursday. “That is why we have this re-engagement process with international financial institutions.”

Finance Minister Patrick Chinamasa said earlier the country would repay at least $1.8 billion by the end of June to be able to resume borrowing in a bid to revive an economy that’s half the size it was in 2000.

Zimbabwe owes $110 million to the IMF, $1.1 billion to the World Bank and $601 million to the African Development Bank, Mangudya said in an e-mailed response to questions on Thursday.

The IMF will only consider requests for financing once Zimbabwe clears its arrears with the lender and the IMF board approves the normalization of relations with the country, spokesman Gerry Rice told reporters on Thursday in Washington.

“Irrespective of the calendar for arrears clearance, the economy needs immediate reforms to address the vulnerabilities that have come to the fore,” Rice said. “Expeditious implementation of those reforms is critical to reverse Zimbabwe’s economic decline.”

The country is experiencing an unprecedented liquidity crisis that’s led to civil servants being paid late and some private-sector workers receiving goods instead of salaries.

That sparked a national strike on July 6. The country was also hit by riots as taxi operators protested against what they said was police harassment and Zimbabwe’s main border post with South Africa was shut for a weekend after the government banned the import of certain goods, sparking demonstrations from traders.

Most banks have limited cash withdrawals to $100 a day, leading to snaking queues at automated teller machines countrywide.

Zimbabwe’s foreign direct investment fell 23 percent to $421 million in 2015, according to a local media report that cited United Nations data.