Zimbabwe’s plans to settle arrears to three international financial institutions will unlock a new level of positive goodwill and foreign direct investment (FDI), the Confederation of Zimbabwe Industries (CZI) has said.
BY BUSINESS REPORTER
Last week, Zimbabwe’s plan to settle the $1,8 billion arrears owed to the International Monetary Fund (IMF), World Bank and the African Development Bank (AfDB) was approved by creditors in Lima, Peru.
The IMF is owed $110 million, World Bank ($1,15 billion) and AfDB ($601 million).
The plan entails, among others, using a bridge loan and the Special Drawing Rights allocation.
Zimbabwe has promised to clear the arrears by end of April 2016 and will engage Paris Club and non-Paris Club members.
CZI yesterday said the move to resolve the debt crisis was a timely boost for business and industry.
“The success in re-engaging with our bilateral and multilateral creditors and the Paris Club creditors will unlock a new level of positive goodwill, cordial perception and ultimately foreign direct investment to the country,” CZI said.
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‘’…CZI sees this as being very positive and timely for business and industry. We wish to pledge our support and progressive collaboration in the next critical steps of honouring the plan that has now been endorsed by creditors.”
Zimbabwe requires long-term financing to help reboot the economy, but is hamstrung by the external debts which have locked the flow of international capital.
Cumulatively, Zimbabwe’s public and publicly-guaranteed debt stood at $8,4 billion as at end of June 2015.
Finance minister Patrick Chinamasa said last week that Zimbabwe would ride on the successful clearance of arrears to the preferred creditors to engage the European Investment Bank, the Paris Club and non-Paris Club bilateral creditors for debt resolution.
