via ‘No one wants to lend bad debtor Zim’ Chinamasa – NewsDay Zimbabwe April 29, 2014
FINANCE minister Patrick Chinamasa last week admitted that international financiers and other countries were reluctant to offer credit lines to Zimbabwe due to its bad debt record.
Speaking in Bulawayo last week, Chinamasa said the country was failing to access new financing which was critical for revival of the economy because it was in arrears in servicing its external debt.
“No one wants to lend Zimbabwe money anymore because we have defaulted in the past. Whether we go to Zambia or to Malawi, it’s the same thing because we are indebted to these countries. We are on our own and we have to be more innovative,” said Chinamasa at the Zimbabwe International Trade Fair business conference.
He also said mobilising resources had become a challenge even from institutions such as the International Monetary Fund (IMF) as the country owed it a billion dollars.
“We are a member of the IMF, but we cannot borrow because we are in arrears. We have arrears to the Bretton Woods institutions to the tune of US$1 billion or so. We can’t access the benefits of membership until we have cleared the arrears,” said the minister.
“There is a common misunderstanding that each time I am going out, I am looking for money. I am actually going there trying to arrange how to pay the arrears. We have to talk to China, India, Kuwait, the Paris Club creditors on how to service the loans so that we can get new lines of credit. Everywhere I go I am being asked about the payment plan and I don’t quite enjoy that question.”
He said no one was directly lending Zimbabwe.
“The funders or international financial institutions from Europe or America are doing it indirectly through institutions in South Africa and when they realise that the money is going to Zimbabwe, these institutions put a 5% or 6% mark-up which they call country risk mark-up,” said Chinamasa.
Zimbabwe’s external debt is said to be over US$6 billion. Chinamasa said there was need to start creating a new track record that would enable the country to borrow and repay its debts.
He said the economy was in a deplorable state, but was not aware what had caused it to be in that poor condition.
“These are the questions that I am still trying to answer as well as what has caused the liquidity crisis. If I get an honest answer to that, then I will be able to find the solution,” he said. “If it is political, then the solution must be political; and if it is economic, then the solution must be economic. But, to be honest, I am still grappling to understand what has caused the liquidity crisis in the country.”
Chinamasa said one reason why the economy was in the doldrums was because of the cost structure.
“We are supposed to compete with China, but an average worker in China is getting about US$100-US$150 (salary per month), but here we are talking of US$300-US$500. Workers there work 24 hours, but here it’s six hours,” he said.
Chinamasa said there was need to capitalise local banks, especially those owned by indigenous people, so that they could be able to offer lines of credit to local industries.
COMMENTS
“He said the economy was in a deplorable state, but was not aware what had caused it to be in that poor condition.”
This, from the Minister of Finance!!
The mind boggles…
Chinamasa needs help. Any Zimbo will tell him that its corruption that is unchecked: military controling mines, looting etc. Is he being honest to say he does not know?
@Chaka – No he is simply reading the garbage in his Song Sheet.
Has chinamasa forgotten that his boss once told the Bretton Woods institutions to “keep their dirty money”.so they are simply keeping their “dirty” money.
“These are the questions that I am still trying to answer as well as what has caused the liquidity crisis. If I get an honest answer to that, then I will be able to find the solution,” he said. “If it is political, then the solution must be political; and if it is economic, then the solution must be economic. But, to be honest, I am still grappling to understand what has caused the liquidity crisis in the country.”
From “our” educated doctorates!
When you take money and do not pay it back that is called theft. When you take other people’s property and do not pay for it that is also theft. If you are a thief you are a criminal. Who in their right mind would give money to a known criminal?
The truth is the truth is it not?
Reminds me of Zimbabwe Finance Minister Chinamasa –
Swollen in head, weak in legs, sharp in tongue but empty in belly.
Mao Zedong
You could also add empty in pockets too !!
If you are not true to yourself ,you can never correct your mistake . Zanu is doomed.
Is this guy for real. There are about 12 million Zimbabweans who could tell him who there is a liquidity crisis. He must start looking at himself and the party he is a part of. yes! That would be a good starting point Mr Chinamasa. Then try the greed and corruption; the multi billions lost in your chaotic and utterly destructive land police, ZPF’s policies that destroy a nation and then try God’s judgment for a sinful nation, blood in our soil, hatred, unforgiveness, arrogance, violence etc, etc
Unreal!!! asking for answers but just will not listen to those that are given, how much longer do we have to put up with nonsense???
He said the economy was in a deplorable state, but was not aware what had caused it to be in that poor condition?
But, to be honest, I am still grappling to understand what has caused the liquidity crisis in the country?
Uhhhhh Rampant theft?? Incompetence?? or maybe just pure stupidity!!!
Pure stupidity is the correct answer.
VaChinamasa, the answer is simple: corruption, looting by the army, and disregard of the rule of law.
Destroying 5000 companies back in 2000 for a start-and the associated upstream and downstream infrastructure. Paying parastatal bosses $500000 a month. Rampant corruption. Military jaunts in the Congo costing hundreds of millions. Mercedes benz’s and wild shopping trips. Taking delegations of over 100 people to the UN or other external meetings. Blind theft. Money from diamond sales ending up in private bank accounts. Ministers companies not paying their correct tax (if at all) Agricultural production plummeting despite the ‘incredible success’ of the ‘land reform’ Grace Mugabe grabbing Mazowe. Chinamasa et al grabbing Kondozi. Stealing the gold from the vaults at the Reserve Bank-where did that end up I wonder. Alienating the West and telling them to ‘go hang themselves’, ‘go to hell’, ‘keep your filthy imperialist money’,Gono destroying the Zimdollar and doling out money to zanu pf ministers and friends. I could actually go on all day…
yah jono you stay in zim for sure
So could we all…..Do you think Chinamasa is reading this?
Do you think Chinamasa can read?
In a democracy the retention of power is dependent upon the country’s economic performance. Accordingly, any policy decisions made in democracies carefully consider the economic impact. In Zimbabwe power is retained regardless of the performance of the economy. Accordingly policy decisions in Zimbabwe are made oblivious of and without any regard to the economic impact. Over the last 14 years Mugabe has shot from the hip in this regard, done what he wants regardless of the effects on the economy. The result is a track record that terrifies any would be investor and which no number of “Zimbabwe is now open for business” statements will expunge.
“He said the economy was in a deplorable state, but was not aware what had caused it to be in that poor condition.”
I thought this was already concluded. Were we not told it was the MDC, sanctions and the GNU? Now the cabinet is clueless of the causes.
What a bunch of imbeciles.
When will one of these toss pots open up to their SQUANDERING??!
Surprise,surprise,surprise !!! No money to pay the bills, I wonder why that is then ? Lets start with theft of diamonds by mugabe&co and carry on from there, the list is endless.
So who does this Finance Minister want to bail them out when they squander??
Someone should have boldly questioned the minister why they are forever in debt!