Broke Zim paying $150k on $124m debt

via Broke Zim paying $150k on $124m debt – New Zimbabwe 09/03/2015

THE International Monitory Fund IMF has said Zimbabwe should show a commitment to clearing its accumulative debt if the country is serious about re-engaging with the international financial community.

Harare’s external debt, at $10 billion, continues to block access to fresh funding and government feels its resolution would bring the economy on the growth path.

The country owes the IMF and the World Bank $124 million and $1 billion respectively.

An IMF delegation which has been in the country over the past two weeks on a review mission told a press conference Monday that Zimbabwe was paying a monthly instalment of $150,000 as its debt repayment.

Domenico Fanizza, the chief of delegation, described the $150,000 monthly repayment as a ‘token’ adding that the institution was not going to re-engage with Zimbabwe if the country does not clear its ballooning debt.

“It’s a token payment the country is paying for clearing arrears. It is about $150,000 per month and it changes with the exchange rates,” said Fanizza.

“Yes there are other initiatives to solve debt issues, but the important things that we need to understand is that the situation of Zimbabwe is peculiar because the country does not only have a high debt, there is also the problem that it is in arrears.

“So all these mechanisms that are used out there cannot be used unless these arrears are cleared.”

Finance Minister Patrick Chinamasa, who also attended the briefing, said the government was implementing the staff monitoring programme which the IMF prescribed as a condition for re-engagement.

“We set out our targets, not for the benefit of the IMF but for the benefit of our own country,” said Chinamasa.

“It is important that as a country we turn our country’s micro economic stability as well as strive to re-enter the global economy as a player.”

Last month, Chinamasa pleaded with the African Development Bank (AfDB) to mediate between Harare and multilateral creditors for possible debt forgiveness.

The debt is prohibiting the country from accessing funds which are needed for economic and infrastructure development.