Sector working groups on Arrears Clearance and Debt Resolution Process highlight Government milestones, encourage continued dialogue

SECTOR Working Group (SWG) Co-Chairs of the Structured Dialogue Platform (SDP) on Arrears Clearance and Debt Resolution Process, have highlighted several milestones achieved by the government of Zimbabwe in the implementation of reforms under the Arrears Clearance and Debt Resolution process, during a Technical Meeting held in Harare on Monday.

The process is a crucial step in enabling the Government to address the longstanding debt overhang challenge that remains a significant obstacle to the country’s development efforts.

During the meeting, Government was encouraged to maintain the ongoing dialogue and to accelerate efforts to achieve the set goals and targets outlined in the three matrices of the SWGs, as this will ensure objectives of the debt resolution process are achieved, according to a joint press release issued Wednesday.

The SWGs are tasked with focusing discussions on Government’s implementation of reforms under the three key strategic pillars guiding the process. These include Economic Growth and Stability Reforms, Governance Reforms, and Land Tenure Reforms, Compensation for Former Farm Owners (FFOs), and the Resolution of Bilateral Investment Protection and Promotion Agreements (BIPPAs).

Head of Zimbabwe Public Debt Management Office, Mr Andrew Bvumbe, commended the SWG co-chairs for their diligence and reiterated that the Government takes full ownership, and is committed to the implementation of its reform agenda under the debt resolution process.

Government recently appointed Financial and Legal Advisors, Global Sovereign Advisory and Kelper-Karst Law firm, with support from the African Legal Support Facility to assist with the implementation of the Arrears Clearance and Debt Resolution process.

SDP members who attended the meeting include senior Government officials, development partners, and representatives from the private sector, civil society organizations (CSOs), and the advisors to the High-Level Facilitator, former President Joachim Chissano of Mozambique.

On behalf of the co-chair of Land Tenure Reforms SWG, Deputy Chief Secretary to the President and Cabinet, Mr Willard Manungo, and Chief Director in the OPC, Mrs Anna Tinarwo, highlighted ongoing efforts to make the 99-year lease bankable and tradable.

Stakeholders recently embarked on a study visit to Tanzania to learn from the country’s experience with the bankability and transferability of its land lease documents.

Regarding the compensation of former farm owners, so far 444 farms have been cleared for payment, reads the update. Government has allocated US$35 million in the 2024 Budget for compensating former farm owners who are part of the Global Compensation Deed signed in 2020.

The farmers will be paid for improvements made on the farms. As for the resolution of BIPPAs, 92 farms have been approved for payment. Government has set aside US$20 million for compensation of BIPPA farmers in the 2024 Budget. The BIPPA farmers will be compensated for land and improvements on the farms.

Only farmers from countries that had signed and ratified BIPPAs by the time of the Land Reform Programme in 2000, are eligible for payment. These include; Denmark, Switzerland, Germany, Netherlands and Yugoslavia.

The OPC co-chairs the Land Tenure Reforms SWG with Switzerland, and the United Nations Development Programme.

Land Tenure Reforms are also part of the National Development Strategy 1 Thematic Working Group on Image Building, Engagement and Re-Engagement process for the country.

On the Economic Growth and Stability Reforms, Co-Chair Mr Fidelis Ngorora, Chief Director in the Ministry of Finance, Economic Development, and Investment Promotion, reported progress, including the transfer of the country’s foreign currency-denominated liabilities from the Reserve Bank of Zimbabwe to the Treasury and the establishment of the willing seller willing buyer foreign exchange system.

Commenting on the ongoing technical discussions between the Government and the International Monetary Fund (IMF) that will inform a Staff Monitored Program (SMP), Mr Ngorora stated that both parties are “reaching a common understanding on most critical issues to move forward to the next step”.

The IMF delegation is in the country for its third mission this year. He also mentioned the introduction of the new structured currency, the Zimbabwe Gold, and social protection measures being implemented by the Government.

The Economic Growth and Stability Reforms SWG is co-chaired by the Ministry of Finance, Economic Development, and Investment Promotion, the World Bank, and the International Monetary Fund.

Presenting on the Governance Reforms Sector Working Group, co-chair, Mrs Vimbai Nyemba, Permanent Secretary in the Ministry of Justice, Legal and Parliamentary Affairs highlighted various achievements since April this year. Among these include the drafting of five bills; Anti-Corruption Bill, Public Interest Disclosure Bill, Protection of Whistleblowers Bill, Witness Protection Bill and Zimbabwe Anti-Corruption Act Amendment Bill.

These bills are going through the legislative drafting processes. The Ministry of Justice, Legal and Parliamentary Affairs engaged CSOs to address their concerns regarding the Private Voluntary Organisations (PVO) Bill, which was subsequently reviewed following these discussions.

The bill is now before the Senate. Representing CSOs, Zimbabwe Institute Executive Director, Mr Isaac Maphosa appreciated Government’s engagement with CSOs on the PVO Bill, underscoring the CSOs eagerness for a genuine partnership. Development partners, represented by European Union Ambassador Jobst Von Kirchman, Switzerland’s Ambassador Stephanie Rey, the UNDP Resident Representative Dr Ayodele Odusola, and World Bank Senior Country Economist Victor Steenbergen, acknowledged the milestones achieved by the Government under the three pillars guiding the debt resolution process.

They offered their support to Zimbabwe and stressed the importance of maintaining dialogue and strengthening the macroeconomic framework, particularly in implementing the SMP, accelerating the implementation of the agreed reforms, and continuing collaborative efforts to ensure the success of the debt process.

The private sector, represented by Mr Tinashe Masiiwa of the Bankers Association of Zimbabwe, said the country is moving in the right direction around the bankability and transferability of the 99-year lease and emphasized the importance of enacting policies that instill confidence in the private sector.

Zimbabwe’s total public debt is estimated hovers around US$21 billion as at June 2024 with external debt 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.

In December 2022, 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 AfDB president Dr A. A. Adesina and supported by the High-Level Facilitator, former President Chissano.