No to HIPC status


Reserve Bank governor Gideon Gono says he is against calls for Zimbabwe to be considered for the Highly Indebted Poor Countries (HIPC) status as the country can securitise its resources to unlock funds.

Gono was responding to calls by University of Zimbabwe economist Tony Hawkins for the country to consider that option.

As a country we can show investors what we have and give the necessary conditions that make them buy, said Gono.

We give them guarantees and stick to those guarantees. We can receive incredible amounts of money of which we can use to pay off our debts, he said.

Gono said the state of other 26 African countries considered on the status was not encouraging as they ended up trapped in a vicious cycle of borrowing.

Zimbabwes case, he argued, was different. We are one of the few countries with no mortgage bonds thanks to the Zimbabwe dollar era.

Can you imagine the funds we can unlock if we pool together houses in the northern suburbs. We can securitise the assets that we have in this country and use them to our advantage but of course having those assets is not by itself sufficient we need an enabling environment, Gono said.

Securitisation is the transformation of illiquid assets into liquid assets that are trade-able.