adminNgoni Dapira Business Correspondent
RESERVE Bank of Zimbabwe Governor Dr John Mangudya is optimistic that the economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, will turnaround the economy saying the country is too rich to be poor. He said this on the sidelines of a two-day Zim-Asset mid-term review workshop held in Nyanga.
Dr Mangudya said clearing arrears under the country’s debt clearance strategy was essential to fund Zim-Asset and ensure its success by 2018. “Clearing our arrears to get new lines of credit is critical for us to get new funding for our proposed programmes under Zim-Asset.
“If no new lines of credit come from our development partners then Zim-Asset will be compromised. So beyond doubt the debt clearance strategy is very necessary for the purpose of motivating international financial institutions to fund Zim-Asset,” he said.
Zimbabwe owes the African Development Bank about $600 million, the World Bank over $1 billion and the International Monetary Fund about $120 million. Dr Mangudya said Government pledged to settle the arrears by April next year.
“Zimbabwe owes $10,8 billion to external creditors and of that debt, $6,8 billion is owed to external creditors by Government while $4 billion is owed to external creditors by the private sector,” he said.
The RBZ chief said because of its long overdue debt despite being a member of the World Bank, IMF and AfDB, Zimbabwe could not access loans from the three institutions because of the rules that prohibit financial institutions to lend money to countries that were in arrears and failing to settle their debts.
He said the recent serious re-engagement of creditors by Government through the debt clearance strategy committee that he chaired were positive. The Central Bank Governor however said the process must be accelerated to unlock the economic potential in the country.
“We are going to use our Special Drawing Rights with the IMF to clear the debt which is due to the IMF. And we are also going to use one or two friendly countries to help us clear the debt to the World Bank.
“That is the strategy we took to Lima. All those who spoke, from the United Kingdom representative, to the United States representative, Australia, Germany, France they all supported and asked that the financial institutions should help Zimbabwe recover from its current economic situation,” he said.
Dr Mangudya also called for more seriousness by Government on implementing Zim-Asset particularly on the revival of parastatals and the alignment of laws to the constitution.
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