HomeBusinessZimbabwe to engage World Bank over $1bn debt in 2015

Zimbabwe to engage World Bank over $1bn debt in 2015

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GOVERNMENT will next year engage the World Bank (WB) on its over $1 billion debt with the Bretton Woods institution to enable Zimbabwe to access new capital.

VICTORIA MTOMBA
BUSINESS REPORTER

Finance minister Patrick Chinamasa yesterday said the country was looking at options available to clear its debt with the multilateral lending institution.
The country’s internal and external debt is estimated to be over $9 billion.

“In the next couple of months, we are going to start an engagement with the World Bank just to see what options are there. We are going to start a conversation which we have not yet started on the options on the clearance of arrears. From May onwards, we must start that conversation with earnest what options are there to clear our debt,” Chinamasa said.

“We are going to rely on their technical assistance and co-operation and support. This country need fresh money. What has been inhibiting access to capital markets is basically that we are in arrears primarily with the World Bank and the International Monetary Fund. We are in arrears with creditors.”

Chinamasa said the country was making token payment to the International Monetary Fund, African Development Bank, WB and had now started to pay the European Investment Bank.

He said WB was the country’s largest creditor as the country has not been servicing its loans since 1998.

WB country director for Malawi, Zambia and Zimbabwe Kundhavi Kadiresan confirmed the country owed the World Bank over $1 billion.

The country has failed to attract funding from other financiers due to the debt overhang, while foreign direct investment continues to shy this market due to unfavourable investment policies.

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