Zim focuses on arrears clearance

Source: Zim focuses on arrears clearance | The Herald July 29, 2016

Conrad Mwanawashe in BULAWAYO

Zimbabwe is racing to clean its balance sheet ahead of the international financial institutions’ board meetings expected in October for the country to be considered for fresh capital. At the October 26 meetings, the boards of the African Development Bank, the World Bank and the International Monetary Fund are expected to consider Zimbabwe for a funding programme and therefore it is imperative for the country to have cleared the $1,8 billion arrears to show commitment to dealing with the debt overhang.Zimbabwe owes multilateral and bilateral creditors about $10 billion but arrears have run into $1,8 billion.

Presenting a paper at the ongoing Confederation of Zimbabwe Industries 2016 congress, Reserve Bank of Zimbabwe Governor John Mangudya said clearing arrears could solicit a favourable response from the IFIs.

“We are doing what is humanly possible; we need to pay our arrears by the time the boards of the International Financial Institutions meet,” said Dr Mangudya.

“I understand that the boards of African Development Bank and IMF will meet sometime in October. We need to show commitment to these boards. We cannot get any money before we clear our arrears.

“The boards will meet to consider whether Zimbabwe can qualify under Pillar 2, which is sometimes called a Fragile State Facility. There are only four African states which are considered as fragile states.

“The three others are Eritrea, Sudan and Somalia. We may qualify under Pillar 2. However, we need to show commitment by paying our arrears

“For the IMF we cannot get money without paying so we need to have a business plan for Zimbabwe. We are trying to cleanse the balance sheet of Zimbabwe. Our wish and prayer is that we should pay just before the board meeting.”

Dr Mangudya also commented on other wide ranging issues relating to the financial services sector and the economy in general.

He noted the growth in the use of plastic money saying about $5,5 billion moved through the electronic payment system from $5,4 billion moved in June.

Point of sale transactions grew to $19,3 million in June up from $18,3 million in May.

Volumes on the Real Time Gross Settlement system also grew to $4,5 billion in June from $3,9 billion in May.

“We thank Zimbabweans for a good response to the policy measures. So the measures are working and queues in the banks have shortened. We want to thank Zimbabweans for use the electronic payments systems,” said Dr Mangudya.

On export incentives, Dr Mangudya said if bond notes were to be introduced today, exporters would be entitled to $36 148 455 from total export earnings of $891 549 260.

Monetary authorities introduced the export incentive scheme, backed by a $200 million Afreximbank facility. The bond notes are coming as a funding mechanism of the export incentives to the banking sector.

“Since we announced the policy measures any exporter who exported between May 5 to date is entitled to five percent or 2,5 percent incentives depending on the size of the company. If the bond notes were there today they would get over $36 million as export incentives,” said Dr Mangudya.


  • comment-avatar
    Joe Cool 6 years ago

    Why not focus on repaying that guy his $78 900 which was stolen after it was held as an exhibit?