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Business Writer
Zimbabwe’s huge external debt exposure prevents the country from accessing new financing from the International Financial Institutions (IFIs), according to the 2019 Annual Budget and Economic Review Report released by Treasury last Friday.
The country owed a total US$8,1 billion as at end December 2019, of which US$6,4 billion (79 percent) are arrears.
The total external debt, some of which was accrued as Public and Publicly Guaranteed, is made up of US$2,6 billion to multilateral creditors, US$5,5 billion to bilateral and the remainder to commercial creditors.
Further split, the World Bank Group is owed US$1,5 billion, African Development Bank (US$695 million) and European Investment Bank (US$327 million).
The Bilateral creditors are made up of the Paris Club and the non-Paris Club. As at end December 2019 the Paris Club debt stood at US$3,4 billion and Non-Paris Club stood at US$1,6 billion.
These debts, according to treasury, limits access to external financing from most of the traditional bilateral and commercial creditors.
Zimbabwe missed out on bail out packages that were given to other countries in the wake of the Covid-19 outbreak.
The Finance Ministry, according to the Economic Review, suggested that there is need for “accelerated arrears clearance, debt relief and re-engagement in 2020”.
The outbreak of the Covid-19 is, however, likely to stall such plans given the restrictions placed on the global economy by the coronavirus outbreak and the subsequent restriction in movements.
Online Reporter