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Business Reporter
GOVERNMENT has completed validation of public debt and will soon release a detailed account of the structure of the country’s public liabilities, a senior official has said. Zimbabwe Head of Aid and Debt Management Office in the Ministry of Finance and Economic Development Mr Andrew Bvumbe confirmed in an interview yesterday that validation of public debt has been completed and details would be published soon.
Mr Bvumbe said the previous debt figures that were being bandied about of US$10,7 billion and US$11 billion were just estimates and the exact public debt was much lower.
“We have now finished validation of the public debt and publicly guaranteed debt and we are now preparing the first public debt bulletin, which will give the position of Zimbabwe’s debt. From what we have US$10,7 billion was an estimate, which included, public debt, public guaranteed debt and private sector debt,” he said.
Mr Bvumbe said the audit that had separated public debt, publicly guaranteed debt, private sector debt and liabilities related to the Reserve Bank of Zimbabwe.
Government is still looking at how the RBZ’s debt of US$1,5 billion would treated, but earlier indications were that a Special Purpose Vehicle would be created to handle the liabilities.
Finance and Economic Development Minister Patrick Chinamasa recently said Zimbabwe’s debt was overstated with Treasury estimating it at US$6 billion and US$7 billion.
A debt audit was critical to determine and substantiate the exact amount the country owes creditors as the country seeks ways to expunge the debt or have it forgiven.
Mr Bvumbe said they leant from the experience of Western countries that faced difficulties when they discussed debt forgiveness without full knowledge of what they owed.
Zimbabwe has over the last few years been exploring ways to resolve its debt overhang as this has constrained Government’s efforts to access external lines of credit.
The country requires a huge dosage of funding in both public and private sectors to reconstruct an ailing economy battered by a barrage of illegal sanctions from the West.
But multilateral lenders including the International Monetary Fund, World Bank and Paris Club have insisted on resolution of the old debt before extending fresh funding.
Minister Chinamasa, however, recently implored the IMF to consider extending new lines of credit to enable the country to rebuild its productive capacity to repay loans.
He said the global fund’s insistence that the country first clears its arrears was not tenable as Zimbabwe would not be able to work its way out the economic quagmire.
The fact that Treasury will soon present a US$4,4 billion budget for 2014 goes to show the country’s thin revenue generation capacity. With more than 70 percent of the inflows going to consumptive expenditure little remains to repay debts or invest in the economy.
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