via Zim needs support – Chinamasa – NewsDay Zimbabwe November 8, 2013 by Tarisai Mandhiza
Zimbabwe needs to be capacitated to build a new revenue base and be able to repay its debts to the multilateral financial institutions, Finance minister Patrick Chinamasa has said.
“The creditors who want to be paid will certainly capacitate the debtor. We need to be capacitated into building our own revenue base to pay the debt,” Chinamasa said at the launch of the Securities Commission of Zimbabwe’s new brand and newsletter on Wednesday.
Chinamasa’s remarks came at a time a delegation from the International Monetary Fund (IMF) is in the country to assess progress made in implementing a supervised economic reform programme on Zimbabwe.
The supervised economic reform plan, the Staff Monitored Programme (SMP) is supposed to end next month having run from June.
Chinamasa said one of the aims of the meeting was to verify the size of Zimbabwe’s debt and to agree on the figure.
“We are currently verifying the size of our external debt and to agree on the figure, but indications show that the debt is much less than what the media is telling,” Chinamasa said.
He said indications showed that the external debt was between $6 billion and $7 billion.
Of that debt, about $800 million is owed to the African Development Bank (AfDB) in which $528 million is in arrears.
The country owes about $1,4 billion to the World Bank. Its arrears to the bank are $926 million.
The country’s total debt to IMF is $124 million. Clearance of the debt and arrears is expected to unlock the flow of lines of credit key in stemming the prevailing liquidity crunch.
Chinamasa said Zimbabwe had no capacity to clear the external debt, a view also shared by IMF.
“I understand Zimbabwe has no capacity to clear those arrears and they have also noted we have no capacity. We are currently paying using tokens per month and it will take a million years to pay the arrears,” Chinamasa said.
He said IMF has indicated that Zimbabwe was among the top-five countries that are to be targeted for international capital inflows if Zimbabwe plays its cards right.
He, however, said the issue of the external debt that the country was facing was not a cost of bad governance, but a price for the transformation.
Zimbabwe agreed to an SMP in June this year. The SMP is a key component of Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy and Zimbabwe Accelerated Re-engagement Economic Programme.
The SMP is supposed to help monitor the country’s economic data, transparency in diamond earnings and determine whether the country was able to meet its macro-economic targets such as inflation.
Earlier in Parliament, the Finance minister told lawmakers that the SMP had affected government business.
“The staff monitored programme is placing us at a standstill position. In other words, there is no growth to our economy; there is no new money,” he said.
“So I have been arguing with them that they should provide new money to give us capacity to be able to pay their debt. Any creditor would understand this language that if they are serious about receiving clearance and payments on the debts, they should capacitate us by giving us new money so that we are able to pay and clear our arrears. Basically, that is the message we are conveying in our dialogue with the Bretton Woods Institution.”
No money until an agreement is reached to compensate the former farmers!
So the answer is to borrow more to pay back what is outstanding, without creating capacity?? The price of transformation is the complete implosion of the economy and that fact cannot be glossed over. He is in a corner, painted by policies that are built on revenge, greed and outright illegality.
I am puzzled and perplexed on this issue of asking for additional capital to help the Zimbabwe economy. How has the 6-8 billion dollars that was already loaned assisted Zimbabwe. The health care system is in shambles, educational system is crumbling, unemployment exceeds 70%, highways and the transportation infrastructure has been grounded to a halt, insufficient housing, utility services for power and water are chaotic and obsolete. Where did the money go and why has there been no increase in the quality of life for the people of Zimbabwe. Why would any outsider loan more capital with no expectations of repayment or improvement in the quality of life. Let us take pride in ourselves and fix the situation from within. So please President Mugabe start acting like a leader and give us an example to emulate. Are we to be known as beggars or kings?
You bite the hand that feeds you , shame on you.
To rule like this Mr Mugabe needs a subservient population, dependant on him for favours. He needs land and resources to dispense to supporters. And he must respond with violence to anyone brave enough to stand up to him. The nation remains all but bankrupt and isolated internationally, and life for most Zimbabweans remains paralysed.
Why would any one want to support a government that is totally corrupt and stole elections and refused to follow the simple rules of the GNU to bring about a government for the people. Come on Chinamasa wake up your coffee is cold and you have been dreaming again and your oppressive regime makes Ian Smith look like a saint.
One day we are told that the Chinese will do every thing but now it looks like we still need the imperialist controlled IMF to give us loans. Cant we ask the African brothers to help us? How about if the African presidents donated at 2 million each? I know this sounds foolish but Zanupf supporters must learn the practical effects of their political behaviour. No country lives on its own these days. If they say let us share democratic values it is because we are also going to share economic burdens. If they have to leave us alone politically then they certainly have to leave us alone economically as well.
Your Leader bite the hand that feeds him , mugabe ‘s cabinet since independence is alwys full of looting so called professors , so wth your looting cabinet Zim’s credit history will never improve . Gud African leaders will never insault or bully world supper powers . Why cnt Zim leaders emulate or copy from Botswana?????????
Good on you guys ,good comments.
ZIM NEEDS FREEDOM AND ENVISION. SOME MANY YEARS OF ULTIMATE DARKNESS,SEVERE POVERTY AND CORRUPTION.”If yesterday I fought as an enemy, today you have become a friend. If yesterday you hated me, today you cannot avoid the love that binds you to me, and me to you.” With these words, Robert Mugabe sought to reassure white and black alike on the eve of his swearing-in as prime minister of the newly independent and internationally recognised state of Zimbabwe, 33 years ago. Today it seems astonishing to a generation of young Zimbabweans that the aged and vindictive tyrant who rules them now could have ever talked in such a way.
Mugabe has an economics degree from somewhere apparently. Plus he is on record as having boasted that nobody could have run the economy better than him. Sadcc au zumambeki concur
Post doctorate degree in corruption. Dean in world’s department of global lies and immoral ethics.
Look East policy is not worthy the paper it is writen on. When Chinese give you $3million dollars they mean $3million worth of Chinese labour and materials a failing stadium and a 3million debt. Recolonisation in our face. Zimbabwe will never be a BRITISH colony again !!!
Shoudn’t it be ‘zanu thieves need support with more cash to steal’ comrade china masa?
As one other comment states Chinamasa is asking a lender to give them more money to pay off the old money. Reminds me of an old joke told by bankers. “Banker calls in a borrower to request repayment of the overdraft on the borrowers account. The borrower pulls out his cheque book for that account and says can I give you a cheque?” (think about it!)
Why should any lender provide more money into the bottomless pit that Zimbabwe has become? As someone else asks what has happened to all the money that has been lent in the past perhaps it has been stashed away in Swiss or Chinese bank accounts.
Given Zimbabwes track record over the past 30 odd years why should a lender think that going forward the situation will be any better, what guarantees and or security is being offered to satisfy the lenders. Reliance upon promises of the existing officials would seem to be pointless as it seems that these have not been honoured in the past. Perhaps it is time for the lenders to start looking for and attaching all the external wealth of all those who have become fabulously wealthy at the expense of Zimbabwe. If as is rumoured this is significant then these assets could be realised to pay down Zimbabwes debt. Why should ordinary Zimbabweans be asked to again endure years of economic hardship whilst those who have contributed and or caused the problems be allowed to continue to live the high life and have no consequences for their mismanagement and or corrupt actions. I am always amazed at the IMF/Worldbank and other lenders who continue to assist knowing full well that through corrupt activities of the leaders that money lent will not benefit the country but only the well connected. Perhaps it is time for the likes of these lenders to be transparent in their negotiations with Zimbabwe and Zimbabweans so that everyone knows what is taking place and what the requirements will be. For too long those in power have conducted these negotiations in secret and it is the man in the street who ends up paying the price. Any further money lent should be done so under extremely strict conditions and in a totally transparent manner regardless of so called privacy rules between lender and borrower. Not one more cent without strict accountability.
Who would toss his hard earned saving into an outside latrine infested with margots ( ZANU PF)????
Not in a 1000 years