‘Zim to clear WB, AfDB debt in 12 months’

ZIMBABWE plans to clear its arrears with the African Development Bank (AfDB) and World Bank in the next 12 months, with support from an unnamed creditor country, Finance minister Mthuli Ncube has said.

By Alfonce Mbizwo

The southern African country has been frozen out of international debt markets since the turn of the century after defaulting on loans with multinational lenders, and Ncube says he has secured the support of international creditors and donour countries.

The country owes the World Bank and AfDB $1,8 billion and needs to clear the debt before it can access new credit to revive its faltering economy.

“Under the Lima Plan — the previous debt clearance plan from 2016 — we had a country in Africa (Algeria) that was going to be one of the sponsors. That’s not the case this time, this time one of the sponsors will be one of the creditor countries themselves,” Ncube told NewsDay on Friday.

“We are having conversations with all the G7 countries and there is a possibility of all G7 countries assisting at the same time … in terms of bridging funding.

“What we have now is called the Zimbabwe arrears clearance roadmap because there are things in the Lima Plan which creditors want to see progress on. One of those was this (Transitional Stabilisation Programme) economy reform package which I presented and which was accepted.”

After settling the AfDB and World Bank debt, Ncube said he expected Zimbabwe to settle the $2,8 billion debt to the Paris Club within two years.

“By this time next year, I would like us to have cleared the AfDB and the World Bank arrears and we will have deep conversations on the Paris Club. By end of next year, if all goes well, we should be having a debt restructuring plan by December 2019. But certainly within the two years of the TSP, the faster the better,” Ncube said.

The Highly Indebted Poor Country (HIPC) debt write-off option was also likely to deal with the Paris Club debt despite the World Bank ruling out such an option in 2014.

“I have been in conversation with some of our creditors and in the discussions they said we should leave the HIPC option also on the table. Why should we take it off? Let’s have the best deal. We can only ask and someone on the other side can only say no, if you don’t ask you don’t get.”


Ncube said creditors were also insistent that the country institutes political reforms before any financial rescue package can be made.

“There is buy-in on the economic reforms programmes, but also they want to make sure that on the political front, we make the progress as well, but certainly I know the progress will be made. The Americans have been very clear on the Public Order and Security Act and the Access to Information and Protection of Privacy Act in terms of amending those legislations and also on electoral reforms so that by the next election, some improvements will have been made.

“That is very important because what it means is that (Zimbabwe) will be an upper middle-income country and the institutional environment must be such that it reflects that prosperous country which is inclusive to all.”

12 Comments

  1. tendai chaminuka

    I remember some years back when I delivered my 9th baby and there was a new cabinet,the then new Minister of Finance told us that we should focus on clearing our international debts and two years later a great chunk was cleared but only to be told that no money is coming becoz of political reforms which needed to be carried out.ZIDERA summarised it all.It seems we never learn.Ncube the only political reforms wanted is the removal of zanu p.f according to these G7 guys coz ED has tried to be more liberal saka beware kuita heart failure owing to disapointments

    1. And why do we always aim at reviving the economy from borrowed money? Ncube of all people, and educated as you are, should know better. It’s now clearly convincing to all that use their heads that the Professor at the helm of our treasury is nothing more than an academic. This is no time to be playing Mickey Mouse games with the economy and the sooner Zimbabweans realise that they have to do away with chiparty cheZanuPF the better.

    2. No ‘great chunk’ was ever settled, a relatively minor credit was offset against the debt.

  2. Borrowing from Peter to pay Paul shows that we have nothing intellectual and practical to offer in terms of economic solutions. It doesn’t work. Political reforms are best when done voluntarily not being used to get money, has this become a mercenary govt? Why should we be told to align our own sovereign laws against our own constitution. Doing this voluntarily shows a lot to the outside world than being “dragged” to do it which also speaks volumes about the vision of those supposedly “leading” us – walk the talk. Right now it is becoming very clear how costly it is to the nation to have a partisan media, electoral commission, compromised judiciary and disputed election. It costs more than all the jobs, houses and cars given to the mercenaries.

  3. Minister ncube kutaura kwamusina kuswera

  4. For a moment I thought we were going to clear the debt from tax savings or something, instead we will be clearing the debt through borrowing from elsewhere!!!. This is the most clueless Finance minister ever, shockingly so far Chinamasa is proving to have been better

  5. Right below this story is one saying this year’s deficit will top 3 billion dollars. How will this be financed? Repay 3 billion then borrow another 3 billion? Doesn’t make a lot of sense.

    1. Well if we borrow to settle our overdue arrears we can then borrow even more to get deeper into debt. Don’t you love it? This lot will leave the repayment problems to the next generation of taxpayers.

  6. we have heard that before anyway how far on naming and shaming the kings and queens of the black market ring

  7. Begging other creditor nations to borrow more debt to pay off over interested debt. Oh how the financial minds of Africa work. If this was not so sad of an ideal it would be funny.

  8. this is ridiculous did you hear what Prophet Makandiwa said STOP BORROWING MONEY RATHER BORROW CAPITAL GOODS LIKE HEAVY DUTY MACHINES

  9. DID YOU HEAR WHAT PROPHET MAKANDIWA SAID, BORROW HUGE MACHINES AS CAPITAL INVESTMENTS NOT MONEY……

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