The African Development Bank (AfDB) is helping Zimbabwe resolve its debt with bilateral and multi-lateral financial institutions to enable the country to regain the status as one of the continent’s top economies, outgoing president Donald Kaberuka said on Monday.
BY NDAMU SANDU IN ABIDJAN, Ivory Coast
The country owes $1,4 billion to the World Bank, $639 million to AfDB and $120 million to the International Monetary Fund.
Zimbabwe suffered a decade of recession which was only halted by the use of multi-currencies in 2009. Kaberuka told journalists here on Monday that the essential work had been done by Zimbabwe.
“The bank is working with Zimbabwe such that the country returns to where it was,” said Kaberuka, who is completing his second and final term at the helm of AfDB on August 31.
He said the roadmap towards regaining its former status was a function of sound policies that attract foreign direct investments as well as support from the international community.
“The essential element of the work has been done by Zimbabwe.We are working together to try and find a solution on how the arrears can be settled so that it (Zimbabwe) engages fully with the international community. That is work in progress,” Kaberuka said.
AfDB was tasked by Sadc and the African Union to bring Zimbabwe and its creditors on the table to resolve the debt crisis.
This culminated in the first meeting of Zimbabwe and its creditors in Tunisia in 2012. Subsequent meetings have followed.
Zimbabwe is in desperate need of cheap concessionary funding to help reboot the economy.
However, the funders are unwilling due to the country external debt estimated at $8 billion. Experts say the country urgently needs lines of credit to grow the economy which is showing signs of stress evidenced by massive de-industrialisation and informalisation.
This has seen Zimbabwe being turned into a vendor economy with few resources trickling to Treasury in the form of tax revenue.
A report released by AfDB on Monday recommended that Zimbabwe should continue implementing “structural reforms to improve the business environment, achieve a sustainable current account balance, reform public enterprises and make growth inclusive”.
Zimbabwe is under an IMF successor economic reform programme. In a latest audit of the Staff-Monitored Programme, IMF had made progress in implementing the reform plan.
IMF said Zimbabwe would this year focus on reducing primary fiscal deficit to raise the country’s capacity to repay, restoring confidence in the financial sector, improving business climate and garnering support for an arrears clearance strategy.