Zim pleads for debt cancellation

via Zim pleads for debt cancellation – DailyNews Live 5 July 2014 by John Kachembere

HARARE – Finance minister Patrick Chinamasa has pleaded with Zimbabwe’s external creditors to inject more capital into the country despite a $9,9 billion debt overhang.

Chinamasa told journalists on Thursday the cash-strapped southern African country had no capacity to repay its debt due to a worsening economic environment.

“We are engaging our creditors with a view to see what measures we can take to alleviate our debt situation.

“In particular, so that we clear the way to attracting foreign direct investment and also persuading them, the very creditors, to grant us money.

“But it’s a very long road, maybe two to three years down the line,” he said.
Chinamasa, however, conceded that it would be hard for Zimbabwe to get fresh capital because it has been failing to service its debt and was negotiating with creditors for an amicable solution.

“What I am telling them (creditors) is that I have no capacity to pay arrears.

“I have no capacity to pay the principal debt. What I want is new money to build capacity especially to the productive sector to broaden the tax base so that the country has the capacity through more inflows into the fiscus to honour its international and domestic obligations,” said the Treasury boss.

Market experts say Zimbabwe’s debt overhang has been hindering the smooth flow of foreign direct investment and economic development.

To its credit, the country has over the past few years crafted various mechanisms — including the Zimbabwe accelerated arrears clearance debt development strategy — to deal with the debt situation.

This comes as the African Development Bank (AfDB) will in September convene a debt resolution forum for Zimbabwe, as the southern African country, steeped in debt, is increasingly failing to repay creditors.

Zimbabwe is in arrears of half a billion to the AfDB, with the total debt being $726 million.

The country also owes $833 million to the World Bank in arrears, while the IMF is owed $124 million.

Despite efforts by officials of the southern African nation to raise funds, international lenders are not willing to extend any more money to the country, precipitating a liquidity crisis and a flat lining of economic growth prospects.

AfDB estimates that Zimbabwe requires $16 billion to revamp its road, rail, telecommunication and power infrastructure, which has deteriorated over the years.

AfDB recently noted that the planned forum, the second in two years and led by its president, Donald Kaberuka, would consider three ways it could help Zimbabwe clear its huge debts.

The bank said it would settle on a rescue package.

“We have three or so options that we think Zimbabwe can pursue and get out of this debt quagmire,” Mthuli Ncube, the bank’s chief economist told a news conference on the sidelines of the AfDB annual meeting.

The deal will be disclosed at the forum in three months’ time.

In 2012, AfDB hosted a debt resolution forum in Tunis, Tunisia for Zimbabwe, where the country’s creditors met to map a strategy.

Meanwhile, outgoing World Bank country manager, Mungai Lenneiye said Zimbabwe does not qualify for debt relief under the Heavily Indebted Poor Countries (HIPC) strategy, because it has capacity for a sustainable economic recovery.

Lenneiye said while Zimbabwe had an unsustainable debt, the fact that it could produce and export meant there is still room for recovery.

Zimbabwe expects to collect $4,12 billion in 2014 in exports, slightly up from $3,8 billion last year.

The International Monetary Fund in January approved a six-month extension of a monitoring programme for Zimbabwe aimed at helping it to clear $10 billion in external debts and give it access to much-needed new international credit.

COMMENTS

WORDPRESS: 11
  • comment-avatar
    John Thomas 8 years ago

    Do not given money to these ZANU thieves. No good can come if it

    • comment-avatar
      Petal 8 years ago

      hear hear hear John Thomas
      they will just loot it and put their hand out to scrounge for more.
      These thieving scumbag Buffoons must learn to pay the money back

  • comment-avatar
    Kevin Watson 8 years ago

    News flash for thief Chinamasa, why would anyone lend money to a country a) that has a record of not paying its debts; b) whose government does not hold to the rule of law; c)whose government does not hold property rights sacrosanct; d)whose government does not enjoy legitimacy except from a lot of dubious African countries; e)whose imports significantly exceed its exports; f)whose government’s consumption expenditure grossly exceeds its tax revenues and shows no sign of changing it’s profligate ways?

  • comment-avatar
    Petal 8 years ago

    sell the theiving scumbags farms, Mansions lambourginis etc.

  • comment-avatar
    Petal 8 years ago

    He should first start with this geriatic and tell him to stop flittering and fluttering and using Private hospitals as far as Singapore

  • comment-avatar

    Where is the money from the diamonds? Thieving Scumbags have the audacity to beg for more so the looting will continue.Rot in hell you bunch of wanton scoundrels.

  • comment-avatar
    KIBBS 8 years ago

    Anybody who lends or grants Chinamasa/zanupf a Cent deserves what they will get in return – Zero Zilch. Donors can take heart in the fact that they will be aiding and abetting a dictatorship that cowers, supresses, intimidates and molests its own people for the purpose of self enrichment – nothing more, nothing less. Arrogant, Thieving Leaches!

  • comment-avatar
    Mlimo 8 years ago

    What about the parties and mansions let alone the overseas trips – if they can afford that they can pay their loans.

  • comment-avatar
    Justice 8 years ago

    Prosecute all the thieves, find the loot, have a free and fair election and then we can talk about some debt relief.

  • comment-avatar
    Ephraim Bunhu 8 years ago

    World bank ,IMF and AfDB tighten your purse strings the liquidity crunch will force this junta into submission because they cannot have things their way all the time.

  • comment-avatar
    JOHNSON 8 years ago

    Oh. We are that poor? What of mega salaries and kickbacks. How does anyone give Zim money…..There is no end in sight….unless govt makes very radical changes. Kufa nenyota here makumbo ari mu mvura? Unobva washaya kuti zvirikumbofamba sei. At leas there is a lesson in this debacle…..that our past behaviour has this irritating knack of following us like a shadow?