Zim must decide on debt relief: AfDB

via Zim must decide on debt relief: AfDB – DailyNews Live 22 August 2014 by Lloyd Mbiba

HARARE – The African Development Bank (AfDB) has said the decision to get Zimbabwe’s staggering US$10 billion external debt written off under the Heavily Indebted Poor Countries (HIPC) initiative, lies solely with the ruling government.

HIPC is a debt relief programme managed by the AfDB, International Monetary Fund (IMF) and the World Bank.

Economic experts have urged Harare to work out modalities to clear the debt in a bid to enable the resource-rich southern African country, isolated from international capital over the past decade, to once again tap from international capital markets again.

But President Mugabe’s Zanu PF has vigorously opposed the country’s admission into HIPC, saying Zimbabwe was not poor were it not for so-called targeted sanctions, and therefore cannot be declared a HIPC.

Zimbabwe is locked in a conundrum of whether to declare itself a HIPC to get the staggering debt written off by the Paris Club of government lenders that Zimbabwe owes. Mateus Magala,  AfDB resident representative, said the ball was in the government’s court concerning HIPC.

“Well, I mean that decision definitely rests solely with the Zimbabwean government as a sovereign state,” Magala told the Daily News on the sidelines of the unveiling of a power transformer at Norton substation.

“We are in fact in the process of discussing various options and we advise and also help to discuss what could be the best way to go.

“But ultimately, the final decision will be made by the government of Zimbabwe.”

Experts have said Zimbabwe should aim to have its debt to international financial institutions cancelled by seeking access to the HIPC, saying the country was missing out on aid packages that are being dished out by the multilateral financial institutions.

But critics have called for a comprehensive audit of the debt first before the country even contemplates participating in the HIPC Initiative.

Magala said the government has engaged the African Bank and other development partners to look at how the debt could be resolved.

“Right now we are in the process of coming up with some options that may be feasible and can be adopted,” he said.

But Magala was not keen to reveal what has been discussed so far.

“It may not be appropriate now to speculate on those options but we are looking at the experience of other countries who have gone under similar situations and bringing those of course  in terms of conceptual frame work and reflect and make a choice,” he said.

“But I am sure the government is eager to learn what has worked elsewhere and what has not worked and what can work in Zimbabwe.

“Together with development partners, I believe we will come up with options sooner rather than later, options that will address the issue and allow engagement to be accelerated.”

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