Zim needs US$1.8bn to clear debt arrears

Zimbabwe needs US $ 1.8 billion to clear off its debt arrears, Finance minister has said.

This surfaced at a press conference hosted by the minister of finance, Patrick Chinamsa yesterday.

“We are looking for a strategy to clear off our debt arrears which amount to $1.8 billion,” said minister Chinamasa.

As at June 2015, Zimbabwe’s public debt amounted to $8,4 billion.

Minister Chinamsa remains optimistic that Zimbabwe will be considered and will enjoy the benefits derived from being a member of the African Development Bank (AfDB), International Monetary Fund (IMF) and the World Bank.

“We have demonstrated that we have the capacity to get out of this mess,” he said adding that once the debt is cleared the country becomes a full member of the multilateral institutions.

He added that if the debt arrears are cleared Zimbabwe will be accommodated by the three multilateral institutes.

According to Finance Minister, paying off debt arrears will open up communication avenues with many creditors.

“When we  pay up engagement with the Paris club, multilateral, and bilateral creditors will begin.

“We will be able to access capital on the international capital market something we are not able to do right now,” he said.

He also said, “We are going to work out a debt strategy so that we clear our debt arrears. That’s the only way for us to start enjoying the benefits of our membership with IMF, World Bank and AfDB.

However, the minister could not divulge more information on how and when the money would be acquired but he pins his hopes on the goodwill of creditors.

Speaking at the same press briefing, visiting IMF Africa group 1 Executive Director Ms Chileshe Mpundu Kapwepe, who will represent the country’s position to the IMF board noted some challenges in the road to recovery.
“The decline in commodity and the slowdown in Chinese activities have negatively impacted countries and Zimbabwe is not an exception.

IMF Africa group 1 Executive Director Ms Chileshe Mpundu Kapwepe, will represent the country’s position to the IMF board

Meanwhile the International Monetary Fund team is in the country for a review of the second economic reform plan for Zimbabwe.

To access loans from the bilateral institutions Zimbabwe has been urged to first pay its arrears.

IMF says it is ready to help Zimbabwe financially once the country shows commitment to clear its arrears to multilateral and bilateral financial institutions.