Zim in crunch debt talks

LIVINGSTONE MARUFU

President Emmerson Mnangagwa’s administration will next week meet the international creditors in Harare in a crunch arrears and debt clearance meeting to check on progress made by the country in meeting its timelines.

The dialogue will be put to test Zimbabwe’s economic and political reforms as the nation heads to the polls on August 23.

Finance and Economic Development deputy minister Clemence Chiduwa told Business Times this week that a delegation will be in the capital to check on the progress made in terms of arrears clearance and debt strategy.

“The high powered delegation is expected to be in the capital Wednesday afternoon to check the progress so far and see if the recommendations could be turned into measurable progress on the ground to inform a consideration of the lifting of the sanctions under Zimbabwe Democracy and Economic Recovery Act [ZIDERA].”

He said this is critical for re-engagement with the United States.

Zimbabwe is expected to fully fulfil all the conditions under ZIDERA so that verifiable progress made can be used to support advocacy for the lifting of the sanctions imposed by the US Congress.

Akinwumi Adesina, Zimbabwe’s arrears clearance and debt resolution champion, said last month that there is collective action among partners to help Zimbabwe out of the woods.

The African Development Bank president said there was a “fantastic session” during the bank group’s annual meetings in Egypt, painting a rosy outlook in Zimbabwe’s efforts to mend relations with bilateral and multilateral creditors.

“It [the session] was incredible and you got a sense of collective action to put our hand around Zimbabwe. There is still a lot of work to be done. A lot—economic, governance and land issues. But there is an agreement we should work together to get solutions to help Zimbabwe out of the sanctions situation,” Adesina said.

Zimbabwe’s total consolidated debt stands at US$17.5bn.

Harare is in arrears for failing to service debts to the AfDB, the World Bank and the European Investment Bank.

The country owes US$1.48bn to the World Bank, AfDB (US$671m), the European Investment Bank (US$372m) while the Paris Club and non-Paris Club are owed US$3.55bn and US$2.22bn respectively.

The balance is owed to bilateral creditors, multilateral creditors, blocked funds, Treasury bonds and other creditors.

Zimbabwe is also expected to honour property rights and pay the US$3.5bn compensation deal of the former farm owners.

“The international financiers will check progress on the US$3.5bn compensation of the former farm owners and compensation of those whose farms were protected under the Bilateral Investment Promotion and Protection Agreement. The compensation will certainly take the reengagements and engagement processes to another level,” Chiduwa said.

Three sector working groups have been formed and there are benchmarks, which would be used to track progress.

The government has begun engagements with countries whose nationals were affected despite being protected under BIPPAs.

So far engagements have been made with Germany, The Netherlands, South Africa and Switzerland on the resolution of BIPPAs.

According to the roadmap, Zimbabwe will negotiate a supervised economic reform plan, the Staff Monitored Programme (SMP) next month and July.

This comes after a draft policy matrix for the SMP in place.

Zimbabwe has identified key priority areas that require funding during the SMP implementation period: education, social protection, health, agriculture and climate change.

The three sector working groups will also meet during this period and Harare also expects comments and feedback from capitals during this period.