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Zimbabwe must pay its US$10,4 billion dues to international lenders if it wants to access new money for economic growth from multilateral financial institutions, Reserve Bank of Zimbabwe governor Dr John Mangudya has said.
For years, Treasury bosses have been racking their brains over Harare’s debts to the IMF, World Bank and African Development Bank.
However, there was a major breakthrough at the IMF-World Bank annual meeting in Lima, Peru in early October when lenders accepted Zimbabwe’s debt clearance strategy. Dr Mangudya, who was with Finance and Economic Development Minister Patrick Chinamasa in Lima, exclusively told The Sunday Mail that Harare was in good stead to access new money for key economic projects.
“Barring all the reasons why we were not paying, we owe people money and the fact of the matter is if we don’t pay, we continue to increase the country risk. We need to know that if we go out to look for money, we will get that money at high interest rates as we have not been paying.
“The more we don’t pay, the more we increase the country risk. If you owe someone, there are two choices. The first is to repay or if you are not paying the full amount of money, you need to restructure that debt.”
He continued: “So, we are saying, ‘As Zimbabwe, we have been utilising money without repaying both interest and capital and the only way out is to repay.’ What we are simply doing is unlocking new money and what we are saying is ‘Repay!’
“We are even mortgaging our children! We are paying so that we put a stop to arrears to – at the end of the day – unlock new funding.”
Zimbabwe’s debt clearance strategy involves seeking bridging finance to settle AfDB arrears, while Special Drawing Rights held by the IMF will be used to settle a US$110 million debt with that institution.
Authorities expect to have also cleared US$1,1 billion owed to the World Bank by April 2016.
There are plans to engage bilateral creditors on outstanding repayments to them.
Online Reporter