Zimbabwe Moves Toward Strategy for Managing US$8 Billion Foreign Debt
Finance Minister Tendai Biti said foreign debt can only be cleared if the government embraces a common vision on how to handle it
The Zimbabwean Cabinet recently agreed on a hybrid debt strategy combining debt relief and leveraging national resources to pay down foreign debt Zimbabwean Finance Minister Tendai Biti said Wednesday that Zimbabwe won't be able to tap into a US$30 billion fund run by the African Development Bank to help member states over the next five years because it must first clear debt arrears to the AfDB, the World Bank and the International Monetary Fund. Zimbabwe owes the AfDB a total of US$400 million, the World Bank US$1.2 billion and the International Monetary Fund US$140 million. Its total foreign debt amounts to some US$8 billion. Biti said foreign debt can only be cleared if the government embraces a common vision on how to handle it. The country's national unity government Cabinet recently agreed on a hybrid debt strategy combining debt relief and the leverage of national resources to pay down the country's stock of debt. Biti told VOA Studio 7 reporter Gibbs Dube that he will push for implementation of the debt-clearing initiative in his mid-term fiscal review which is set for Wednesday, July 14. Despite being barred from fresh loans from international financial institutions, Harare has lined up US$50 million from the AfDB among other institutions to overhaul the Zimbabwe National Statistics Agency. Officials said this is an important step in putting an IMF staff-monitoring program in place, a milestone toward debt forgiveness. Statistical agency sources said former Economic Planning Minister Elton Mangoma secured the funds. IMF officials have been pushing for staff monitoring of the economy, but said Zimstat must meanwhile be reformed. The government has divided along party lines over the IMF monitoring proposal, which President Robert Mugabe's ZANU-PF party says will undermine national independence. Such programs have been put in place in Chad, Sudan, Togo, the Democratic Republic of Congo and other countries. Mangoma, recently shifted from economic planning to head the Ministry of Energy, told VOA Studio 7 reporter Blessing Zulu that the current statistical reports are not a reliable basis for making policy.