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Herald Reporter
GOVERNMENT has commended the African Development Bank (AfDB) for its support in the country’s Arrears Clearance and Debt Resolution Process.
Speaking during the Bank’s 60th anniversary celebrations held in Harare on Tuesday, Minister of Finance, Economic Development and Investment Promotion Professor Mthuli Ncube said the debt resolution process was key in capacitating the Government to resolve the long-standing challenge that keeps hindering the country’s development efforts.
“In Zimbabwe, the Bank has been a pillar of strength and support as we pursue our development aspirations. We applaud Bank President, Dr Akinwumi Adesina, for championing the ongoing Structured Dialogue Platform under the Zimbabwe Arrears Clearance and Debt Resolution Process,” Prof Mthuli said.
In December 2022, the Government established a Structured Dialogue Platform with all creditors and Development Partners, to institutionalise structured dialogue on economic and governance reforms to underpin the Arrears Clearance and Debt Resolution process.
The process is being championed by the Bank president Dr Adesina and supported by the High-Level Facilitator, former President of the Republic of Mozambique, His Excellency Joachim Chissano.
While addressing notable guests drawn from the Government, development partners, private sector, and civil society, AfDB Country Manager Moono Mupotola said the country’s “substantial public debt remains a significant obstacle to attaining Zimbabwe’s development goals.”
She further highlighted several Government milestones since the implementation of reforms underpinning the Arrears Clearance and Debt Resolution process.
These include the transfer of the country’s liabilities from the Reserve Bank of Zimbabwe to Treasury and ongoing technical discussions between the Government and the International Monetary Fund that will inform a Staff Monitored Programme (SMP).
Ms Mupotola, however, cautioned that implementing the SMP will require additional financial support, especially in the social sectors.
She also revealed that progress has been made under the Land Tenure Reforms, Compensation of Former Farm Owners (FFOs), and the Resolution of Bilateral Investment Protection and Promotion Agreements (BIPPAs) pillar.
To date, over 400 former farm owners have been cleared along with 94 BIPPAs designated for payment under the 2024 National budget.
Ms Mupotola reaffirmed the Bank’s commitment to supporting Zimbabwe in its journey to achieve the goals of its National Development Strategy and to become a middle-income country by 2030.
The Bank Group has invested over US$1 billion since it began operations in the country in 1980.
This investment covers various sectors including transport, energy, agriculture, water and sanitation, health, education, and governance.
Zimbabwe’s total public debt is estimated at US$21 billion, as at June 2024.
External debt is estimated at US$12.3 billion, while domestic debt amounts to US$8,7 billion.
External debt is owed to bilateral and multilateral creditors with the latter accounting for US$3,1 billion.
Out of this multilateral debt, US$681 million is owed to the African Development Bank, US$1,5 billion to the World Bank, and US$427 million to the European Investment Bank.
The Government has demonstrated its commitment to the re-engagement process through quarterly token payments to all its bilateral and multilateral creditors.
To support government efforts on the Arrears Clearance and Debt Resolution Process, the AfDB provided technical assistance through the Support to Arrears Clearance and Governance Enhancement project funded to the tune of US$ 4 million.
The next High-Level Structured Dialogue Platform meeting is expected to take place before the end of the year to assess progress made under the Arrears Clearance and Debt Resolution Process.
Online Reporter