Zim determined to deal with foreign debts

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Harare (New Ziana) – The Zimbabwe government paid out US$50.28 million between January and September this year in service of its active debt portfolio, while token payments were also made for debt arrears owed to International Financial Institutions and the Paris Club debtors.

In an update of the country’s debt situation, Finance and Economic Development Minister Mthuli Ncube said the total Public and Publicly Guaranteed (PPG) external debt, as at end of September 2022 was estimated at US$14.04 billion.

It comprised US$5.7 billion of bilateral debt (41 per cent), US$2.6 billion of multilateral debt (18.4 per cent), US$3.4 billion RBZ debt (24 per cent), and US$2.3 billion blocked funds (16.6 per cent).

Of the total bilateral external debt of US$5.7 billion, Paris Club debt amounts to US$3.6 billion, while US$2.2 billion is owed to Non-Paris Club creditors.

Ncube said the government had been making regular payments to service its debts.

“The Government made external debt service payments for the active portfolio, amounting to US$50.28 million during the period January to September 2022. A total of US$13.4 million was paid in Quarter 1, US$13.9 million in Q2 and US$13.5 million in Q3. The active debt portfolio includes loans from China Eximbank, BADEA, OFID, IFAD, India Eximbank and Kuwait,” he said.

“In addition, as part of the re-engagement process, the government is making quarterly token payments of US$3.2 million to the International Financial Institutions (IFIs) and the 16 Paris Club creditors.

“To date, cumulative token payments to the World Bank amount to US$67 million, US$35.4 million to the African Development Bank Group and US$4.4 million to the European Investment Bank. Cumulative token payments to the 16 Paris Club Creditors amount to US$8 million.”

Ncube said the external debt overhang continued to weigh down heavily on the country’s development efforts.

“Access to external financing remains very limited due to the accumulation of external debt arrears,” he said.

Zimbabwe has not been able to service much of its foreign debts over the years due to a sustained economic downturn caused largely by illegal Western sanctions imposed on the country.

As a result, most international lenders stopped giving fresh loans to the country until it cleared its previous debts, a condition Zimbabwe has been unable to meet.

But the country has declared its intention to resolve its debt challenges and as part of a plan, the government adopted the Arrears clearance, debt relief and restructuring strategy and has roped in the African Development Bank to champion the debt clearance strategy.

Having successfully helped other countries, including Somalia and Sudan, deal with their debt problems, the AfDB has pledged to similarly assist Zimbabwe tackle its foreign debts.

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