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Zimbabwe has been facing a serious liquidity crunch since the adoption of the multi-currency system in 2009. Illegal sanctions imposed on the country by the West at the turn of the century have not helped matters since most international financial institutions that can help the country perceive it as a risk.
Only a few international banks are prepared to do business with the country and the money they are providing, while woefully inadequate, is very expensive for local industry.
The only source of funding that can help move the country forward is from multi-lateral agencies such as the International Monetary Fund and the World Bank. These institutions stopped extending financial support to the country a long time ago citing the arrears Zimbabwe had accumulated. The country owes multi-lateral institutions $4billion.
However, we know that the real reason financial support was withdrawn was because the institutions were toeing the line of the United States of America and Western Europe who are the major shareholders in the financial institutions. The arrears were a guise to extend the sanctions as these two financial institutions are supposed to be independent.
We believe that now the country has emerged from an undisputed general election convincingly won by Zanu-PF and endorsed by many international organisations as free and fair, multi-lateral financial institutions need to respect the will of Zimbabweans and engage their legitimate government and resume extending full financial support.
Zimbabwe has vast resources which, with adequate monetary support, can be used to liquidate its foreign debt.
We believe that if additional loans are extended to the country by the IMF, Zimbabwe would be able to pay off its debts.
The world must remember that the last time the country accessed loans from multi-lateral financial institutions, the Chiadzwa diamond fields, easily among the largest in the world, had not been discovered while platinum mining was still in its infancy.
The exploitation of these two minerals at full capacity means the country can generate billions of dollars.
As an active member of the IMF, World Bank and African Development Bank, Zimbabwe deserves to enjoy full benefits of its membership, including access to loans.
At the moment, the IMF is extending limited support to the country such as staff monitored programme but no money is coming in.
These international financial institutions need to listen to the plea by Finance and Economic Development Minister Patrick Chinamasa to avail new loans to the country because without new funding, economic development in Zimbabwe would remain depressed with the country unable to pay off its accumulated debts.
Bongani Ndlovu
Online Reporter