HomeLocal NewsZim will resolve debt crisis: AfDB

Zim will resolve debt crisis: AfDB

THE African Development Bank (AfDB), which is owed US$600 million by Zimbabwe in arrears, has ratcheted up pressure on President Emmerson Mnangagwa’s government demanding that Harare speedily institutes credible reforms as part of a broader plan to pay off long-standing debts to international lenders.

By Kuda Chideme

The bank has remained one of the few lenders still extending assistance in the form of grants to the southern African nation which remains shut out by international financial institutions after defaulting on loans.

AfDB country representative Damon Kitabire told the Zimbabwe Independent in an interview soon after meeting with Finance minister Mthuli Ncube on Monday morning, hours before Reserve Bank governor John Mangudya announced his monetary policy and prior to the minister’s fiscal measures, that Mnangagwa’s administration had an opportunity to solve the country’s debt crisis and set it on a recovery trajectory.

Kitabire said going to the crunch International Monetary Fund and World Bank meetings which will be held in Bali, Indonesia, next week, Zimbabwe would have to reaffirm its commitment to improving the economy and settling its obligations.

“We are looking at reforms that can turn the economy around; the bottom line is to get things moving. For now we don’t know what the government has prepared, we are yet to see,” he said.

“But we are hoping to see government pronounce itself well on policies and strategies that can actually be implemented. Lima was three years ago under different circumstances and it is a different scenario now so we expect to see something progressive. ”

Zimbabwe is one of the founding members of the continental bank.

Along with the British government, the AfDB is believed to be playing a key role in supporting a new plan for the clearance of arrears and re-engagement with other international lenders.

In March, the bank advanced a US$25 million trade finance line of credit to a local bank for on-lending to the private sector.

AfDB has also supported several other projects such as the Bulawayo water and sewerage management to the tune of US$2,4 million, Zimbabwe Integrated Urban Water Management US$2,4 million, Kariba Dam rehabilitation project US$32,5 million, beef and leather value chain US$2 million, capacity building project for public finance and economic management US$22,5 million.

Mangudya announced that government had secured a US$500 million facility which will be used to ring fence accounts holding foreign currency.

The facility is part of a US$1,5 billion package to support nostro accounts for the importation of crucial products such as medicines and petrol.

Other projects which have been supported by the bank are governance and institutional projects (US$7,2 million),strengthening institutions of transparency and accountability (US$2,8 million), Alaska-Karoi Power transmission reinforcement project (US$18,9 million), institutional support for State Enterprises Reform and Delivery Project (US$4,2 million).

Recent Posts

Stories you will enjoy

Recommended reading