JOHANNESBURG — The African Development Bank (AfDB) director for the Southern African Development Community (Sadc) region, Ebrima Faal, says there are a lot of positives expected to come out of Zimbabwe, but the bank is constrained from lending money to the country because of the country’s massive external debt.
Report by Business Reporter/Bdlive
Zimbabwe has an estimated external debt of $10,7 billion including arrears.
Last year, the government adopted the Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy — a debt plan to deal with the country’s debt trap — which has been blamed for disqualifying the country from accessing long-term capital.
Faal told South African media that the AfDB was poised to spend about $125 million on rehabilitating some of Zimbabwe’s water and energy infrastructure, especially around Harare, but said the bank could not spend more money until the country had signed a programme allowing it to clear the national debt.
The AfDB, according to Faal, had also set aside just more than $500 000 to help Zimbabwe, Somalia, Sudan and South Sudan clear their debts.
The apportionment of these funds was not finalised and they would be disbursed on a “first come, first served” basis.
Already Zimbabwe, with the bank’s help, had set up the institutions and facilities needed to provide governance, which put it in “a fairly good position” to access a slice of the $500 000, Faal said.
“We see a lot of good things happening in Zimbabwe. People, investors, approach us,” he said.
Prime Minister Morgan Tsvangirai early this week said the country had the natural resources that could be used to pay off the debt.
He said what was needed was to put the resources to good use in a transparent and accountable manner.
Meanwhile, the regional lender has only managed to contribute a fraction of the $94 billion a year that Africa needs to develop its infrastructure, which makes the proposed Brics (Brazil, Russia, India, China and South Africa) development bank a welcome proposition
Faal said while 55% of the bank’s investments went to infrastructure, “what the bank can contribute (to what Africa needs to spend) is small in the greater scheme of things.
“We look forward to dialogue on what is envisaged and how the Brics can contribute,” he said.
Africa was able to spend about $72 billion a year on infrastructure, but there remained a
$480 billion shortfall over the next decade, South African President Jacob Zuma said in April last year.
The idea of the Brics bank was first mooted last March at a meeting of the five Brics countries.
It has been proposed that the bank raise funds from the private sector instead of developed nations, which have been hard-hit by the global financial crisis. A Brics meeting that is expected to discuss the idea is scheduled for March in Durban.