Zimbabwe sets up multi-lateral committee to deal with $10bn debt problem

Zimbabwe sets up multi-lateral committee to deal with $10bn debt problem

HARARE May 20 (The Source) – Zimbabwe has set up a committee, which will include officials from multilateral finance institutions, to come up with a strategy to clear its $10 billion debt, finance minister Patrick Chinamasa has said.
Central bank governor John Mangudya will chair the committee, which will also include officials from the finance ministry.

The southern African country has for years been deliberating on various routes to clear its arrears with the International Monetary Fund, the World Bank group and African Development Bank, among other lenders.

Zimbabwe’s debt overhang has precluded it from accessing badly needed funding from international financiers. The country has, since 2009, re-engaged the Bretton Woods institutions after nearly a decade of frosty ties, during which Zimbabwe’s economy shrunk by as much as 40 percent according to official figures.

On Tuesday, Chinamasa said the multilateral committee had been established to step up re-engagement with the institutions and develop a roadmap aimed at resolving the country’s debt problem.

The committee is expected to provide its feedback report in October during the IMF/WB annual meeting in Peru.

Members of the committee, World Bank Group Africa Group 1 Constituency executive director Peter Larose and Mohamed Rafique, an AfDB executive director, who are visiting Zimbabwe to assess the political and social dynamics of the country, are expected make a strong case for Harare at their respective boards.

Larose told a press briefing late Tuesday that the resolution of Zimbabwe’s debt overhang and clearance of arrears needs to be treated with urgency.

“The current lack of new financial flows to jumpstart economic growth is well noted. It is therefore imperative that efforts towards debt relief and the clearance of arrears, especially to the Bretton Woods Institutions and to the African Development Bank, be pursued vigorously,” Larose said.