Zim must pay its debt

Source: Zim must pay its debt – DailyNews Live

20 March 2017

HARARE – Reserve Bank of Zimbabwe governor John Mangudya over the weekend
reiterated the country’s commitment to repay its external debts.

“Zimbabwe owes many people money and we owe it to pay everyone; there is
no favouritism. If you borrow money from the World Bank, you need to pay
the World Bank, if you borrow from China, you have to pay the Chinese, if
you borrow from Malaysians, you need to pay Malaysians; so we are paying
everyone according to availability of resources,” he said.

This comes as the country, which is currently saddled with a $10,8 billion
debt overhang, is currently ineligible to access long-term finance from
the World Bank, the International Monetary Fund (IMF) and African
Development Bank over non-payment of arrears since 1999.

The reality is that there is nowhere to run and Zimbabwe should just go
back to the basics of repaying what it owes, whether it is to the
Western-linked IMF and other institutions or the favoured eastern Chinese
economic giant.

As such, it is important that the country walks the talk and starts
implementing its debt repayment strategy if Zimbabwe entertains any hope
of attracting foreign investment to grow its economy – including the
agriculture sector.

It is widely accepted that the country will forever be dependent on aid
unless the commercial farming sector – destroyed by the contentious land
reform exercise – is rebuilt in some form.

In order to rebuild the sector, foreign investment will need to flow into
Zimbabwe and some displaced farmers will need to return.

The Zimbabwean government will also have its part to play, and indeed
there are some confidence-building measures that President Robert Mugabe’s
government could undertake.

For many years, various governments have been demanding that Zimbabwe
honours its obligations pursuant to bilateral investment treaties, whereby
the country promised to pay foreign investors compensation in the event of
expropriation.

Several business delegations that have visited Zimbabwe from different
countries including Australia, France, Britain and even the Chinese, have
been singing from the same hymn book.

They have demanded that the government creates a conducive business
environment by among other things clarifying economic polices such as the
indigenisation laws while also respecting property rights among other
things.

Mugabe may find that if his Zanu PF-led government makes serious attempts
to honour Zimbabwe’s public international law obligations to investors,
then the foreign investment and the engagement by the West that have been
absent for so long may return.

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