AfDB to cancel Zimbabwe’s $600mln arrears

AfDB to cancel Zimbabwe’s $600mln arrears

HARARE, September 15 (The Source) – The African Development Bank’s (AfDB) has agreed to cancel Zimbabwe’s $601 million arrears with the bank, a senior official announced on Tuesday, as the southern African country intensifies efforts to deal with its debt to foreign lenders.

“The total amount of Zimbabwe’s arrears to the African Development Bank is $601 million. The resources that we are putting aside will clear the African Development Bank arrears,” AfDB executive director Tapsoba Sibry, who is in Zimbabwe to discuss the country’s debt resolution strategy, told reporters.

Zimbabwe owes foreign creditors $9 billion and is currently seeking approval from creditors for its strategy to resolve its external arrears to international financial institutions. The proposal will be discussed at a stakeholders meeting on the sidelines of this year’s Annual Meetings of the IMF and the World Bank to be held in Lima, Peru in October.

The cancellation of the AfDB arrears amounts to half the total overdue payments owed to AfDB, the IMF and World Bank.

“We want to reassure Zimbabwe of the commitment of the African Development Bank to continue assisting the country in clearing its arrears. The level of resources that will be put in this operation will be decided when we return to (AfDB headquarters) Abidjan. At this point we have just reassured the minister that we have the resources to do so,” Sibry said.

Zimbabwe has not received loans from the IMF, World Bank and African Development Bank since 1999 and its economy is slowing down due to lack of foreign investment, weak commodity prices and the underperformance of key sectors such as agriculture.

A team from the International Monetary Fund (IMF) which was in the country  early this month to review Zimbabwe’s progress under the fund’s Staff Monitored Programme (SMP) — an informal agreement between a government and IMF staff to monitor the implementation of its economic reforms — gave the government a thumbs-up on its implementation of targets set under the SMP.