Shot in the arm for Zim

debt, president Mr Donald Kaberuka has said.
According to Press reports, Mr Kaberuka indicated that the Tunis-based regional financial institution was willing to assist Zimba-bwe as long as local authorities agree on an International Monetary Fund-monitored economic recovery plan.
Zimbabwe owes the IMF, the World Bank, AfDB, the European Investment Bank and other members of the Paris Club and non-Paris Club bilateral lenders about US$7 billion.
Last week, Mr Kaberuka told the Euromoney-sponsored Zimbabwe investment conference that the AfDB was ready to work with the Government and its multi-lateral parties on the matter.
He noted that there was broad agreement that Zimbabwe’s external debt was unsustainable and stood in the way of efforts to raise funds to support economic recovery.
Mr Kaberuka, however, said the Government must quickly agree on a debt management framework and do more to boost investor confidence and partner’s perception on policy predictability.
Said Mr Kaberuka: “Fundamental issues remain – policy predictability, clarity with property rights and the cost of doing business that hamper even faster economic recovery.”
Over the past decade, Zimbabwe has failed to service its debts because it lacked capacity.
Zimbabwe needs significant funding to support recapitalisation of its key sectors, such as manufacturing, mining, tourism and agriculture.
Mr Kaberuka urged the Government to clear misconceptions about empowerment laws, which have been perceived as the State’s ploy to seize foreign-owned companies.
He commended the country’s macroeconomic stability, restored since the formation of the inclusive government in 2008.
But he observed: “This progress must now be consolidated and translated into better livelihoods for the people of Zimbabwe.”
He said while Zimbabwe had made considerable recovery, it was a long way from operating at its previous potential.
In efforts to address its debts-related challenges, Zimbabwe has come up with a debt-management strategy.
The strategy involved the use of aspects of the Highly Indebted Poor Countries initiative and revenue from minerals to clear its debt obligations, most of which are in arrears.
Economic Planning Minister Tapiwa Mashakada recently said the country would only use the best aspects of the HIPC initiative. It hoped to have up to 60 percent of the debt forgiven.
The country has also set up a debt-management office amid calls for more consultations on future debt contraction.