New deal to retire Zim debt

infrastructure and economic programmes.
“We cannot deal with these infrastructural challenges without funding and assistance from international financial institutions and bilateral partners.
“But the rules of the international community are such that as long there are arrears, we will not be able to access this funding,” Minister Biti told journalists at the Zimbabwe Euromoney Conference.
The strategy will involve stricter debt management through a debt management office, creation of database validation and reconciliation with all creditors, negotiating arrears’ clearance and a relief plan.
It will also include re-engagement with the international community for normalisation of relations, removal of sanctions and leveraging resources.
Minister Biti said the external debt validation and reconciliation exercise to ascertain Zimbabwe’s full indebtedness was already underway.
The validation of the external debt is expected to facilitate the country’s negotiations for arrears’ clearance and debt relief.
On leveraging resources, the Government will finalise a new mining legal framework.
It will also carry out a geological survey to establish the quantum and potential value of the country’s mineral resources.
This will help the country avoid financial prejudice and underestimation of minerals.
A Cabinet re-engagement committee has been set up to spearhead the process of normalising relations with the international community.
This is expected to result in the removal of the illegal sanctions.
This will be supported by an accelerated re-engagement economic programme for restoration of normal relations with development partners.
The re-engagement programme, to run for the next 18-24 months will be a “stepping stone” towards arrears’ clearance, debt relief and new financing.
A new legal and institutional framework for debt management, capacity development will be established for future debt portfolio monitoring.
Some of the institutions owed by Zimbabwe are the African Development Bank (US$529 million), World Bank (US$1,5 billion), the International Monetary Fund (US$550 million), European Investment Bank (US$221 million), among others.
“The implementation of the policies enunciated in ZAADDS, thus lays the foundation for facilitating re-engagement with all creditors and the international community on arrears’ clearance,” said Minister Biti.
Zimbabwe’s huge debt liability is largely a result of the country’s economic instability over the decade to 2008, which constrained its capacity to repay.
Last year, the AfDB cited the country’s debt overhang as a major stumbling block to Government’s efforts to attract foreign investment.