$10,7bn external debt cripples Zim

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.

5 Responses to $10,7bn external debt cripples Zim

  1. Jet January 25, 2013 at 4:57 pm #

    At least he has faced the reality that there wil be no donations from the west.ko vanhu only comment zvemaslogan leaving the reality kubusiness .shame on puppets

  2. The Patriot January 26, 2013 at 5:57 pm #

    Assuming we have a taxable pollution of 10 million people, Zimbabwe just needs to collect $1000.00 from every individual over a one year period or $84.00/m. Alternately, worst case scenario, 5 million people translates to $2000.00 per individual per annum. Lets sacrifice for a better Zimbabwe. Less talk more action.

  3. Vakeni January 27, 2013 at 8:18 am #

    There is no need to assume when we have factual information. According to the 2012 census the population is 12900000 of which about 40% is under 15 yrs .Over 80% of employable population is unemployed. Over 200000 are employed as civil servants who earn between $200 and $400. Income below $250 is not taxable and hence the taxable population is very low. Whats need to be done is for Tsvangiria to tell his western handlers to remove sanctions so that we can trade our minerals freely. The removal of sanctions will result in accountability and transparency of all exports proceeds.

  4. Gutter Poet January 27, 2013 at 5:26 pm #

    @Vakeni- the last part of your post should be framed in gold in all EU and US offices if they are really keen on assisting poor Zimbabweans. Having said this our biggest enemy is not sanctions..it is corruption. The sad thing is instead of investing the ill gotten gains in the land our leaders invest same bounty in Europe and the trappings of luxury of same. Talk of double-speak, while haranguing the Europeans at every given opportunity they can not let go their life styles of imitating same Europeans. There is a tale told by a Nigerian journalist which warrants repeating here. A former Nigerian Minister was travelling in France and he told himself that he was going to have a go at one of the French escorts before he caught his flight back home. The enterprising escort (prostitute) told him it would cost him two thousand euro for the night. This was way above his budget so he pleaded that as a poor African man could the escort consider one hundred euro. The escort laughed him in the face and he went back to his hotel room determined that as soon as he got back home he would steal as much as possible as prices here were ten times more than his home in Lagos. The next morning while strolling to catch a taxi for the airport with wife in tow he bumped into the same prostitute who shouted her lungs out “You see monsier this is what you get for a hundred euro!”…The sheer humiliation of it, the minister could have died on the spot but it made him more resolute to steal as much s possible when he got back home..this humilitation was not worth it, he reasoned! Now you know how whole sale corruption was born in the land!

    Then of course there is the tale of two former colleagues who had gone to college together in the sixties and had become government ministers in their respective governments. It turned out that one was asian the other african. A conference was held in the capital of the asian minister’s country and on seeing his friend from college days, he invited him home. The African minister nearly bust a gut and his eyes dilated like Inidan rubber..he could not believe that his colleague had become this rich in such a short period..his colleague told him he was getting 10% of all the government contracts his ministry gave. With eyes openned the African minister got to work immediately when he got back to his own country and when his Asian colleague visited he could not believe what he saw. In the Minister’s garage were over 100 luxury cars, and the fellow literary lived in a hotel..how had this guy done this in only two years…? 100% came the answer.

    I guess the message is arrest corruption, development will follow period..

  5. Santos January 28, 2013 at 3:13 pm #

    There are many areas which in my opinion need an extreme makeover. Corruption, tax systems and other economic policies are just some. Zimbabwe needs an enlightenment of ideologies on how things should work for the good of the country

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