ZIMBABWE will this week seek buy-in from creditors on its strategy to clear its $1,8 billion debt to three preferred creditors at the World Bank/International Monetary Fund (IMF) meetings in Lima, Peru.
BY VICTORIA MTOMBA
The preferred creditors — IMF, World Bank (WB) and African Development Bank — enjoy first preference when clearing the arrears.
Zimbabwe has been lobbying creditors to accept its proposals and Reserve Bank of Zimbabwe (RBZ) governor John Mangudya recently visited European capitals to explain the country’s debt clearance strategy to individual countries ahead of this week’s meeting.
Mangudya went to Paris (France), Berlin (Germany) and Brussels (Belgium).
He told NewsDay on Friday that his tour of Europe was a success.
“We now go to Lima and the purpose is to build consensus and the meetings will be with both bilateral and multilateral institutions. The meeting was organised by multilateral institutions to discuss the strategy on the arrears clearance of Zimbabwe,” he said.
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“The sequence after that is the outcome will help these financial institutions — African Development Bank, WB, IMF — when they go to the boards on decisions on Zimbabwe,” Mangudya said. The meetings are held every year by the WB and IMF with the 188-member States where the president updates member countries on the financial situation of the institutions.
The meetings are attended by central bank governors and alternate governors, who in most cases are Finance ministers.
Zimbabwe’s debt to external and internal creditors is $8,4 billion as at June 30.
Mangudya said once the country gets the nod to clear the arrears, Zimbabwe will be able to access long-term capital needed to reboot the economy.
Currently, the country relies on short term capital which is unsustainable for long-term infrastructure and development projects.
“Going forward, strong support at the Lima meeting, a successful completion of the Staff-Monitored Programme and a deepening of ongoing reform would set the stage for advancing the reengagement process with the IFIs and bilateral creditors,” the IMF said in a recent statement.
The IMF said it supported Zimbabwe and its pursuit towards arrears clearance and debt relief.
“Staff will remain engaged with the authorities to monitor progress in the implementation of their economic programme, and will continue providing assistance in order to support Zimbabwe’s capacity building efforts and its adjustment and ongoing reform process,” the IMF said.
