Reserve Bank of Zimbabwe governor Gideon Gono scorned Finance minister Tendai Biti’s proposal to declare Zimbabwe a highly indebted poor country (HIPC).
HIPC refers to a group of developing countries with high levels of poverty and debt overhang which are eligible for special assistance from the International Monetary Fund (IMF) and the World Bank (WB).
“We have people proposing that Zimbabwe should go to the IMF and World Bank to declare a highly indebted poor country so that our world debts are scrapped, but we cannot do that because we have resources and we are not poor,” said Gono while speaking at a dinner to review the country’s economic performance at the weekend.
“We are sitting on platinum valued around $400 billion and we say we are poor. We just need to give industry its rightful place,” said.
The HIPC programme was initiated by the IMF and the WB in 1996, following extensive lobbying by non-governmental organisations and other bodies.
It provides debt relief and low-interest loans to cancel or reduce external debt repayments to sustainable levels. To be considered for the initiative, countries must face an unsustainable debt burden which cannot be managed through traditional means.
Zimbabwe’s national debt is said to be more than $7 billion, outstripping the country’s gross domestic product (GDP) which is estimated at just over $6 billion.
On Friday last week, former Finance minister Simba Makoni said the failure by the 2012 National Budget to come up with solutions to deal with external debt shows the inclusive government has no strategy in place.
“The minister’s silence shows he had no plan to deal with our national debt, but I am sure our creditors are waiting to hear from us,” said Makoni.
“There was no discussion of any engagements with creditors on current debt and future financing.”.
Gono noted that Zimbabwe was on the mend but lamented that while the country had noble programmes, the implementation was often marred by political meddling.
He described the inconsistency in economic policy implementation by the inclusive government as a “shame”.
The governor said while Zimbabwe had achieved some growth in the GDP, it was no cause for celebration as the country had potential to attain double-digit growth of the GDP and only then can champagne be popped.
CZI president Joseph Kanyekanye said it was embarrassing that while Zimbabweans had a high literacy rate, people remained poor.
He also noted that all the provinces needed funds to help distressed companies like the Dimaf funds that will be allocated to Bulawayo.
“It is not Bulawayo only that has problems of unlocking funds. Midlands, too, and other provinces are also struggling,” he said.
Kanyekanye added that it was sad that while the Medium-Term Plan had envisaged increased power supply in the country to enable industries to improve their capacity utilization, this was not going to happen in the foreseeeable future.