President Emmerson Mnangagwa early next week flies to Sharm El-Sheikh, Egypt, for a crunch meeting of African Development Bank, at which Zimbabwe’s arrears clearance and debt resolution will feature prominently, according to Presidential spokesperson George Charamba.
No doubt, all his efforts point to determination by Harare on the subject matter but in all this, former Mozambican President Joaquim Chissano’s advice should ring louder in his ears.
Chissano said Zimbabwe has to harvest some low hanging fruits in its arrears and debt resolution process as it seeks to mend relations with bilateral and multilateral creditors.
Zimbabwe is in debt distress and cannot access funding from bilateral and multilateral creditors due to the debt overhang, the bulk of it in arrears.
It has cobbled a roadmap on how to extinguish the debt which has been one of the major stumbling blocks in prospects of development under the second Republic.
It has also promised to undertake economic and governance reforms and will pay the US$3.5bn compensation to former farm owners and resolve the dispute created by the seizure of farms under the Bilateral Investment Protection and Promotion Agreement.
Chissano said in the process of implementing the reforms, Zimbabwe should capitalise on the low hanging fruits such as the conduct of free and fair elections, the 99-year lease, compensation of former commercial farmers under the global Compensation Deed, resolution of farms under BIPPAs, as well as an SMP to anchor macroeconomic reforms.
Elections are due August and all eyes are on Zimbabwe to see whether the country will pass the test and open doors.
“Harvesting these low hanging fruits is critical as they are likely to trigger decisive action towards arrears clearance and debt resolution,” Chissano said.
Since the signing of the Global Compensation Deed in 2020, Zimbabwe has missed payment deadlines to the consternation of the former farm owners that want a quick resolution on the US$3.5bn compensation due to the age profile of some of the members.
This has seen the constituency rejecting the government’s plan to pay compensation using 10-year Treasury Bonds.
Arrears clearance and debt resolution champion Akinwumi Adesina said this week the African Development Bank was assisting Zimbabwe to come up with an instrument to mobilise resources and compensate the former farm owners. This revelation shows there is light at the end of the tunnel.
However, more depends on Zimbabwe with the upcoming harmonised elections under scrutiny.
Mnangagwa this week pledged to deliver a free, fair and credible election saying international observers would be free to come once he gazettes the dates of the election.
It is one thing to promise and another thing to deliver the process. It behoves the government to speak with one voice on key issues.
The recent furore over a new law shielding some procurement by the Ministry of Health and Child Care brought to the fore problems in the VVIP enclosure of the administration after Mnangagwa’s office said it was not aware of the Statutory Instrument.
That episode alone could be a mirror image of what is happening behind the scenes in government.
Governance reforms hold key to the success of the arrears clearance plan.
Adesina said the successes on the political and electoral reforms are crucial to “clear the pathway towards arrears clearance and debt resolution for Zimbabwe.
All eyes are on Zimbabwe and the international community will be closely monitoring developments in Zimbabwe in the run up to the August polls.
