THE African Development Bank Group (AfDB) will convene a forum in September to resolve Zimbabwe’s outstanding over $6 billion external debt, a move that would unlock the flow of lines of credit.
Finance and Economic Development minister Patrick Chinamasa said on Friday significant progress had been made to resolve the country’s debt under the leadership of AfDB president Donald Kaberuka.
“President Kaberuka is once again taking the leading role to convene the next Debt Resolution Forum slated for September 2014. The forum seeks to move forward and finalise Zimbabwe’s debt resolution process,” Chinamasa said.
In 2012, AfDB hosted in Tunis, Tunisia, a debt resolution forum for Zimbabwe where the country’s creditors met to map the way forward.
Latest government data showed that Zimbabwe’s total external public and publicly guaranteed debt (excluding Reserve Bank and private sector external debt) stood at $6,077 billion (49% of gross domestic product) as of December 31 2012.
Zimbabwe owes the International Monetary Fund (IMF) $124 million, AfDB about $800 million (of which $528 million is in arrears) and $1,4 billion to the World Bank.
The huge external debt has been because sanctions on the country militate against the securing of lines of credit needed to reboot the economy.
AfDB estimates that Zimbabwe requires $16 billion to revamp the infrastructure that has deteriorated over the years.
Chinamasa recently said that Zimbabwe had entered into a payment plan with creditors.
“We entered into a payment plan with the Bretton Woods institutions and so far we have been fulfilling that. It’s a token payment as you will appreciate,” he said.
Despite the debt, Zimbabwe has managed to build bridges with the international lenders. IMF has a supervised economic reform programme on Zimbabwe. The plan, Staff Monitored Programme, is up for review next month.
Last year, the World Bank crafted a three-year strategy for Zimbabwe focusing on fostering private sector-led growth, creation of an enabling environment and reducing societal vulnerabilities. The programme runs up to next year.
AfDB has been making funds avalable to Zimbabwe indirectly through the African Export-Import Bank and PTA where it is shareholding.
In 2011, AfDB announced that it was giving a fish project in Kariba, Lake Harvest, $11 million, the banking group’s first private sector investment in years.