Zim turns to AfDB for support

November 9, 2018

 

BERNARD MPOFU

Finance minister Mthuli Ncube has requested the African Development Bank (AfDB) to intensify its role in facilitating Zimbabwe’s reengagement efforts with multilateral and bilateral creditors as the southern African nation pushes for arrears clearance, it has been learnt.

The country is saddled with a $16,9 billion debt, with external debt accounting for approximately $7,4 billion. Out of this, approximately $5,6 billion is in arrears.

Already Zimbabwe settled its International Monetary Fund arrears of $107,9 million in November 2016.

What is now outstanding is the clearance of the outstanding arrears to the World Bank of $1,3 billion, African Development Bank, $680 million and the European Investment Bank of $308 million.

Clearance of the arrears is expected to open fresh lines of credit with international financial institutions which stopped extending support to Zimbabwe in 1999 after the country defaulted on its payment.

Sources this week told the Business Times that Ncube wants Abidjan-headquartered lender to convene a “Friends of Zimbabwe meeting” in one of the European capitals like Berlin, London or Paris in early 2019.

“Finance minister Mthuli Ncube recently met the AfDB Vice President and chief economist Celestin Monga and during this meeting Ncube asked the bank’s president Akinwumi Ayodeji Adesina if he could facilitate a meeting with creditors,” a source said.

“The bank also expressed its commitment to the continued mobilisation of resources so that when ZimFund 2 cycle is concluded in December 2019, resources will be available to embark on ZimFund III.”

Contacted for comment, Ncube confirmed this development.

“I have requested the AfDB to host a meeting of the Friends of Zimbabwe group of countries and those giving support to Zimbabwe. This is part of the international re-engagement drive and our arrears clearance roadmap. It will increase goodwill for Zimbabwe internationally,” Ncube said in a written response to questions sent by this paper.The meeting was held as a follow up to the one held in Bussan, South Korea in May with the AfDB chief, wherein government officials implored the bank to continue playing its facilitative role on the re-engagement front, particularly with regards to the arrears clearance process.

In 2010, a group of donors, in a bid to support priority recovery activities of the Government of Zimbabwe, decided to create the Zimbabwe Multi-Donor Trust Fund, as a successor to the Zimbabwe Programmatic Multi-Donor Trust Fund (Zim-MDTF). The AfDB was designated to manage the ZimFund with endorsement of the government, the donor community and the United Nations.

The ZimFund was established ont May 31, 2010, following approval by the Boards of Directors of the African Development Bank Group of recommendations contained in a document entitled “Establishment of a Multi-Donor Trust Fund for Zimbabwe”. Negotiations between the Bank and donors on the modalities to establish the Fund were concluded in July 2010.

The purpose of ZimFund is to contribute to early recovery and development efforts in Zimbabwe by mobilising donor resources and promoting donor coordination in Zimbabwe, so as to channel financial assistance to such efforts. The thematic scope of the ZimFund initially focuses on infrastructure investments in water and sanitation, as well as in energy.

Zimbabwe was working on the Lima plan – a payment plan agreed with foreign lenders in 2015 in the Peruvian capital.

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