ZIMBABWE should leverage on its vast resource endowment to extinguish its US$8,2 billion debt stock that has crippled the country from accessing fresh lines of credit from multilateral lenders, a top diplomat has said.
The southern African country, mired in an intractable economic crisis that has seen industrial output stagnate markedly and spiking inflation hovering around 400% has been shut out from unlocking fresh credit from International Finance Institutions for non-payment.
A reengagement drive launched by President Emmerson Mnangagwa’s administration, tailored to settle Zimbabwe’s huge external debt, is now dead in the water after the government failed to roll out key reforms.
Notably, Zimbabwe has missed key targets of the International Monetary Fund Staff Monitored Programme.
In an interview with this newspaper this week, Zimbabwe’s Honourary Consul in Israel Ronny Levi Musan said it was imperative for the country to also guarantee property rights under a raft of measures needed to settle its debt.
With investors preferring other relatively stable investment destinations, Musan said, Zimbabwe could also transform its agriculture sector to serve the European export market.
Musan said: “The first thing is not to be so shocked by the number (US$8,2 billion debts). It is important to work on rehabilitation plans instead of panicking. Do you know that before the beginning of Covid-19, the national debt of the State of Israel was US$250 billion? And today it is higher and still Israel’s credit rating is not falling. Why? Because there is proper crisis management.
“Crisis management is not undertaken in one day. There is no magic formula in state recovery. It is a process that President Emmerson Mnangagwa is leading in promoting important reforms in Zimbabwe that will undoubtedly save it from this “big debt”.
“Zimbabwe has natural resources. It has fertile ground that even if you plant a broomstick you will get a fruit tree. You have to manage the crisis properly, promote agricultural development and export agricultural products that can feed European countries, give investors the security they need in order for them to invest foreign currency here,” he added.
The diplomat, who has met Mnangagwa several times since his arrival in the country, also said tackling corruption and quantifying Zimbabwe’s natural resources, particularly minerals, was also part of the mix to resolve the debilitating economic crisis.
“It is also important to develop the value of the assessment of natural resources in the right way, to avoid smuggling channels and to invest in education and training in the fields of technology,” he said.
Notably, Musan highlighted that Zimbabwe could also directly market its diamonds to the trading hub of Israel instead of relying on merchants.
“The problem in this field as I see it, is an incorrect assessment of the value of diamonds whose results enrich a limited number of diamond merchants, who come to buy and sell Zimbabwe’s diamonds abroad in much higher amounts but leave local reserves in deficit,” he said.
“Diamond dealers can certainly make money, no one works for a free. But there is a huge difference between making money and milking Zimbabwe’s resources. I get a lot of inquiries from international diamond traders who trade with Israel, because Israel is undoubtedly a diamond trading power probably now because of the peace agreements with the Emirates,” he said.
Zimbabwe is working towards establishing fully fledged diplomatic relations with Tel-Aviv.