AFREXIMBANK, which has assumed the role of advisor to the government, says international financial institutions (IFIs) will review the country’s debt plan and progress on economic reforms during the first half of 2019 following commitments made during the International Monetary Fund and World Bank meetings in Bali, Indonesia, last month.
In an interview this week, Afreximbank regional chief operating officer for Southern Africa, Humphrey Nwugo, said the bank has held several meetings with the government to fix timelines for reforms ahead of the crucial review meetings.
Zimbabwe’s reform agenda was presented by Finance minister Mthuli Ncube to IFIs, members of the Paris Club and other creditors during the Bali meetings.
“Now there is need to walk the talk, they (creditors) said ‘go and implement what you have to implement and then review’. Recently we held a meeting with the ministry where we agreed on a roadmap to that. So it’s not something that I will disclose but these are processes that we are going through at the moment to assist Zimbabwe to clear the arrears,” Nwugo said.
Clearing the US$2 billion in arrears to the World Bank and African Development Bank (AfDB) is seen as a major step for Zimbabwe to start accessing fresh lines of credit, including from the private sector.
The IFIs, European Union (EU), Germany, among other international lenders, have insisted on a time-bound reform roadmap if Zimbabwe is to access fresh lines of credit. Nwugo said although Zimbabwe’s reform agenda received widespread adulation during the Bali meetings, implementation remained key.
“The reception has been very encouraging. The outcome of the event was that Zimbabwe should go back and implement what they had promised. We have now put timelines of achieving the goal and the idea is that during the first half of next year, we will go back to the international financial lenders, to say that this is where we are. We expect and hope that they will accept that they will accept the message. That will be the first step towards arrears clearance,” Nwugo said.
Building from the 2015 Lima Plan, Zimbabwe will clear the arrears in 12 months, Ncube says. Recently, EU ambassador to Zimbabwe Timo Olkkonen told the Zimbabwe Independent that the reform agenda was crucial in the re-engagement process, adding the international community was waiting to see “concrete steps”.
“Zimbabwe needs the international community to be supporting the country, for example the issue about the debt restructuring and those kinds of issues. They will not only need the EU but the international community at large. I think it’s clear that many of the international partners are waiting to see what concrete steps Zimbabwe will take on the reform agenda to engage more closely, for example in terms of the debt restructuring agenda,” Olkkonen said.
Afreximbank also hinted on the possibility of extending a bailout package to Zimbabwe as part of the continental bank’s advisory role to help the southern African country extinguish its mounting arrears with various multilateral credit lending institutions.
“We are helping Zimbabwe, not with specific amounts but with support to get the international creditors to either reschedule the loan or repay the facility. We are advisors to the government. We are playing an advisory role at the moment, but if it gets to a point where we need to pour money into it, we will certainly do that,” Nwugo said.
Afreximbank has todate; cumulatively made disbursements in excess of US$5 billion to Zimbabwe. The Reserve Bank of Zimbabwe has negotiated several lines of credit with Afreximbank and the bank recently revealed it had secured a loan facility to guarantee the 1:1 convertibility value of Real-Time Gross Settlement (RTGS) balances into the US dollar.