THE government plans to reduce its outstanding arrears towards parastatals as well as complete the validation process between line ministries and service providers as part of reforms under the International Monetary Fund (IMF)- supervised programme.
Report by Tapiwa Zivira
In a recent letter of intent signed by the Finance minister Tendai Biti and Reserve Bank of Zimbabwe governor Gideon Gono, the government said resource constraints had placed State-owned enterprises in a complex web of cross arrears.
Both central and local governments owe parastatals and other players in the private sector.
Inter-parastatal debt is currently over $1 billion.
The country has 78 parastatals that are not performing well due to various challenges that include debts and shortage of funding.
“This web of claims and counterclaims burdens the Budget and public service delivery and undermines the solvency and liquidity of both parastatals and the private sector. Our programme includes a strategy to address outstanding arrears and to curb the accumulation of new arrears towards parastatals and other creditors,” a joint statement by Biti and Gono reads.
The Finance ministry in the first six months of the year undertook a validation process between line ministries and service providers in order to establish the stock as of 2012.
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“The strategy will entail, among other things, identifying potential funding and regular reporting through the public finance management systems. Finally, we will commit not to accumulate new domestic payment arrears in 2013.”
Through the submission, the government pledged to make payments to service providers within 60 days of invoice receipt. The government said it would introduce demand management measures to control its consumption of service provided by utilities.
The government also pledged to make monthly commitments to the poverty reduction and growth trust fund of $150 000.
The country recently adopted the IMF’s Staff-Monitored Programme (SMP) that would help the country to clear its $10,7 billion debt and readmission into the Bretton Woods Institution.
Biti said the SMP signified government commitment in re-engaging with the international financial community.
