HomeBusiness DigestGovt debt for Chinese MA60s attracts US$1,8 million interest

Govt debt for Chinese MA60s attracts US$1,8 million interest

Paul Nyakazeya

A GOVERNMENT debt accrued from the purchase of Chinese passenger aircraft has added a US$1,8 million interest bill, according to information obtained by businessdigest.


interest is in respect of a US$12 million debt outstanding after the purchase of two MA60 passenger aircraft by government from China’s state-owned Aviation Industry Corporation of China (Avic) which last year.

The debt, outstanding since April, is understood to have raised concerns the Chinese might join the league of disgruntled creditors failing to claim back loans overdue for repayment by Zimbabwe.

Zimbabwe has received funding for projects as well as credit lines from China under Sino-Zimbabwe deals promoted by President Robert Mugabe’s government under the “Look East” policy.

The Chinese gave Zimbabwe a third aircraft as a token of appreciation for the purchases.

The third plane was grounded just weeks after it was handed over to the Zimbabwean government in January.

The interest is likely to increase the stock of the country’s foreign debt, reported to have declined after a payment of outstanding general resources account arrears to the IMF earlier this year by the central bank.

According to details obtained from reliable sources, government had promised to clear its debt with Avic, acquired under a financial arrangement with the Chinese government, by the end of last year.

But it failed to fulfill its obligation because of acute foreign currency shortages in the country, although the central bank recently splurged huge sums of foreign cash on the purchase of vehicles for government departments and ministries.

Air Zimbabwe spokesman, David Mwenga, refused to comment when contacted by businessdigest this week, referring all questions to the Transport and Communications ministry.

Transport minister Chris Mushohwe, and his permanent secretary, Engineer George Mlilo, could not immediately give any comments, requesting written questions.

Recent Posts

Stories you will enjoy

Recommended reading