HomePoliticsZim debt now US$10,7 billion

Zim debt now US$10,7 billion

Staff Writer

ZIMBABWE’S external debt overhang is now estimated at US$10,7 billion and, at 111% of GDP, has become an impediment to external sustainability, according to an IMF report seen by the Independent.This debt overhang was as at end of 2011, with the equivalent of 59% of GDP being arrears.
The fund warned of a financing gap before any measures of around US$838 million for the year 2012, a development it said needed an urgent policy response. This is because projections of a balanced budget for 2012 made by Finance minister Tendai Biti last year are now in doubt due to revenue shortfalls and expenditure overruns.
The IMF projected a total revenue shortfall of US$640 million as total revenue collection in the first five months of 2012 was US$200 million lower than anticipated, mainly due to low diamond dividends.
The report was compiled by an IMF team headed by Alfredo Cuevas and comprising Murna Morgan, Christian Henn, Eliza Lis and Futoshi Narita, which visited Harare from June 13-27 to conduct routine Article IV consultations with the country’s authorities.
The fund strongly cautioned against government’s collateralisation of mineral revenues to access more debt.
 Meanwhile TN Holdings’ shareholders have approved the demerger of TN Bank from the holdings company, which will see telecoms company Econet get a 45% stake in the bank. All shareholders voted for the resolution, which comes at a US$20 million cost to Econet. Chief executive Tawanda Nyambirai said the bank will take advantage of Econet’s strength and stability with products such as Ecocash expected to be key drivers of growth going forward.

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