Zimbabwe needs to be capacitated to build a new revenue base and be able to repay its debts to the multilateral financial institutions, Finance minister Patrick Chinamasa has said.
REPORT BY TARISAI MANDIZHA
“The creditors who want to be paid will certainly capacitate the debtor. We need to be capacitated into building our own revenue base to pay the debt,” Chinamasa said at the launch of the Securities Commission of Zimbabwe’s new brand and newsletter on Wednesday.
Chinamasa’s remarks came at a time a delegation from the International Monetary Fund (IMF) is in the country to assess progress made in implementing a supervised economic reform programme on Zimbabwe.
The supervised economic reform plan, the Staff Monitored Programme (SMP) is supposed to end next month having run from June.
Chinamasa said one of the aims of the meeting was to verify the size of Zimbabwe’s debt and to agree on the figure.
“We are currently verifying the size of our external debt and to agree on the figure, but indications show that the debt is much less than what the media is telling,” Chinamasa said.
He said indications showed that the external debt was between $6 billion and $7 billion.
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Of that debt, about $800 million is owed to the African Development Bank (AfDB) in which $528 million is in arrears.
The country owes about $1,4 billion to the World Bank. Its arrears to the bank are $926 million.
The country’s total debt to IMF is $124 million. Clearance of the debt and arrears is expected to unlock the flow of lines of credit key in stemming the prevailing liquidity crunch.
Chinamasa said Zimbabwe had no capacity to clear the external debt, a view also shared by IMF.
“I understand Zimbabwe has no capacity to clear those arrears and they have also noted we have no capacity. We are currently paying using tokens per month and it will take a million years to pay the arrears,” Chinamasa said.
He said IMF has indicated that Zimbabwe was among the top-five countries that are to be targeted for international capital inflows if Zimbabwe plays its cards right.
He, however, said the issue of the external debt that the country was facing was not a cost of bad governance, but a price for the transformation.
Zimbabwe agreed to an SMP in June this year. The SMP is a key component of Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy and Zimbabwe Accelerated Re-engagement Economic Programme.
The SMP is supposed to help monitor the country’s economic data, transparency in diamond earnings and determine whether the country was able to meet its macro-economic targets such as inflation.
Earlier in Parliament, the Finance minister told lawmakers that the SMP had affected government business.
“The staff monitored programme is placing us at a standstill position. In other words, there is no growth to our economy; there is no new money,” he said.
“So I have been arguing with them that they should provide new money to give us capacity to be able to pay their debt. Any creditor would understand this language that if they are serious about receiving clearance and payments on the debts, they should capacitate us by giving us new money so that we are able to pay and clear our arrears. Basically, that is the message we are conveying in our dialogue with the Bretton Woods Institution.”
