PRESIDENT Emmerson Mnangagwa has embarked on a diplomatic initiative with Britain and other creditors as the country seeks debt rescheduling and cancellation to improve its risk profile and credit rating.
By Bernard Mpofu/Melody Chikono
This development could signal a shift in the country’s debt strategy. The government has in the past rejected any debt cancellation modelled along the Highly Indebted Poor Countries initiative. But the latest details suggest Harare is now ready for debt forgiveness to unlock critical funding.
The government had committed to paying the US$1,2 billion arrears to the World Bank by April this year, as the first step towards unlocking fresh funding from multilateral institutions.
The pledge came at a time Harare was engaging British multinational bank Standard Chartered Plc and other institutions to help raise US$1,8 billion to clear arrears to international financial institutions (IFIs) for the country to secure US$2 billion in fresh funding.
Diplomats this week said Zimbabwe was now negotiating for a combination of debt rescheduling and debt forgiveness.
Zimbabwe is currently saddled with an over US$1 billion debt overhang that has affected the country’s access to concessionary funding. The government is making frantic efforts to clear US$1,8 billion arrears owed to the World Bank and AfDB.
Mnangagwa told the Zimbabwe Independent during a press briefing that Harare has asked Britain to play a leading role in tackling its debt as diplomatic relations thaw following the dramatic toppling of long-time leader Robert Mugabe through military pressure.
Hours after Mnangawa’s inauguration last December, Britain sent its envoy to meet the new leader, signalling its commitment to restoring mutually beneficial relations.
“There is a lot of discussion going on between us. We have also asked the EU as well as Britain and France, and recently I had my envoy Chinamasa (I sent him to Britain, to France and to Sweden and the other Vice-President (Kembo Mohadi) has been to Japan, Spain and I think Portugal,” Mnangagwa said.
“The other Vice-President should have gone to Russia and India, but because (Russian foreign minister Sergey) Lavrov was coming here, so we just cancelled it two days before because VP Chiwenga could have left for Russia on those issues.
“He is still going to go and meet Mr (Narendra Damodardas) Modi in India on these issues. After a month or so (after my inauguration) she sent another envoy, a lady, Miss (Harriett) Baldwin, she came and we gave her our areas of concerns and said can Britain assist us in rescheduling or writing off some of the debts which we have and they agreed.
“I think you have the statement by Boris Johnson (British Foreign Secretary) — he has said they would do their best to assist Zimbabwe in that area where they will try to help us reschedule debts and help us in the Paris Club as well as in the Bretton Woods institutions and that is going on. And when my envoy Chinamasa went there, he met them and the report is very good.
“They are co-operating and in those areas I think there is goodwill and I think we have to see what results we will achieve as a result of this goodwill that is prevailing currently.”