Zimbabwe close to historic debt rescheduling

This week the government is to finalise its agreement to repay some US$1.8 billion of arrears to multilateral financial institutions triggering its re-entry into the international financial system after almost two decades in the cold. The news comes as Zimbabweans continue to struggle with a chronic shortage of the US dollar bills, the main denomination in the country’s multi-currency financial system, and the government has announced it will be phasing the payment of salaries for June over the next three weeks.

Source: Zimbabwe close to historic debt rescheduling – The Zimbabwean 2.6.2016

The boards of the International Monetary Fund, the World Bank and the African Development Bank are due to meet in September to confirm the settlement of all outstanding payments to them and discuss plans for fresh loans to Zimbabwe. The road map for Zimbabwe’s return to the international system was launched at the IMF and World Banks’s annual meeting in Lima last September and was finalised at a special meeting at the African Development Bank in Lusaka on 27 May.

Finance Minister Patrick Chinamasa is due to arrive in France on 30 June for talks with the Paris Club of official creditors on a schedule to resolve arrears on bilateral debts. A team from the IMF arrived in Harare on 15 June for follow up discussions after it had assessed Zimbabwe’s adherence to agreed reforms as satisfactory.

He will then come on to London to address the Africa Confidential conference: Zimbabwe: rebooting and rebuilding on July 5th. He’ll be accompanied by a senior delegation including John Mangudya, Governor of the Reserve Bank and the ministers of Trade and Commerce, Mining, and Investment.

The next step is for the government to negotiate a medium-term programme of economic restructuring with the IMF  which will include much tougher measures and more rigorous monitoring but could be worth as much a US$1 billion. The loan conditions will include deep cuts to the public sector payroll, commercialisation and privatisation of state-owned enterprises, and a roster of pro-business policies in agriculture, banking and industry. All that will require much greater accountability and public audits of government institutions.

Quite how those policies can be implemented in the run up to elections in 2018 is where the political scepticism starts. Already dissidents within the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) are rejecting any policies that involve cuts to the public sector payroll, audits on state companies and compensation for white farmers who had farms seized during the land resettlement programme.

Opposition parties accuse the government of bad faith, trying to fix a deal with the IMF and World Bank so that ZANU-PF will remain in pole position to win the 2018 election.

Diplomats and foreign governments also differ over the government’s plan. China, Russia and India are broadly supportive but have been less forthcoming with budgetary cash than the government hoped. But all three are lining up to invest in mining and power projects.

European governments have given conditional support to the deal with the IMF and World Bank but want to see further political and constitutional reforms.

Join us for this special one-day conference on July 5th: Zimbabwe 2016: rebooting and rebuilding.

Full details at www.africa-confidential-meetings.com.

Meet a senior delegation of ministers led by Patrick Chinamasa, Minister of Finance. Plus leading opposition voices, and many from the spectrum in between.

Is Zimbabwe on the way back, or is this another false dawn? Join us for a day of insight and vibrant debate.

See the website www.africa-confidential-meetings.com or call John Bulmer on 01638 743633 or email john.bulmer@africa-confidential.com

COMMENTS

WORDPRESS: 5
  • comment-avatar
    Joe Cool 6 years ago

    Why is this rubbish being recycled a month later? And note that re-scheduled and re-paid are not at all the same thing.

  • comment-avatar

    This is a recycled story – it is absolutely rubbish and has been torn to pieces before by right-thinking Zimbabweans.
    It is classic propaganda from Jongwe House and Nathanial Manheru. Shame on this website to report it again. Zimbabwe is totally INCAPABLE of paying off ANY of its international debt, because the inept members of this country’s kleptocracy are totally and utterly clueless as to how to run a country. The Neanderthals were brighter than this lot we have in Zimbabwe.

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    i am not the one 6 years ago

    Recycled or not, I hope this never comes to pass and that they continue to wallow in their stupidity for many a moon to come. That is of course if there is no calling to heroes acre, which would be cause for celebration.

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    Roberta Mugarbage 6 years ago

    ZANU does not agree with the antiquated Western idea of paying loans back.
    Only the African Development Bank is stupid enough to lend to ZANU thieves.
    Last week the begging bowl was presented to France, no limits as to the amount.
    No honour, no shame, African stupidity at its worst.

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    Kevin 6 years ago

    Yes and the Tooth Fairy helped by the Easter Bunny will help with the negotiations. Bankers do not lend money to people who do not repay their loans. Bankers do not lend money to people without a credible plan on how that money will be used to create wealth so that the loan can be serviced and repaid. Bankers do not lend money to people who do not subscribe to the rule of law. Bankers do not lend money to thieves. Banker do not lend money to people who are careless with their money and assets. Chinamasa is an idiot for wasting hard earned forex to go and find all of the above out.