BY MTHANDAZO NYONI
GOVERNMENT has, in the first two months of the year, only managed to pay $195 million, or 2%, towards the country’s domestic debt which is currently hovering around $9,5 billion, Finance and Economic Development minister Mthuli Ncube has said.
The southern African economy is sinking in domestic and external debt estimated in the region of US$17 billion, with external debt amounting to about US$7,7 billion.
Ncube told a business meeting during the Zimbabwe International Trade Fair in Bulawayo last week, that government was committed to clear its arrears.
“In 2018, payments towards domestic debt amounted to US$1,62 billion. In January and February 2019 payments towards domestic debt amount to US$195 million,” Ncube said.
“Government is committed to implementing reforms and completing the arrears clearance road map. The fiscal reform and re-engagement efforts are setting the country back in the arrears clearance plan (and) government will continue engaging all bilateral and multilateral creditors,” he said, adding that Treasury had also stopped relying on the central bank overdraft facility.
Ncube said government will make deliberate and targeted interventions to facilitate the re-opening and resuscitation of strategic companies through various financing mechanisms particularly joint ventures with private investors.
Zimbabwe’s economy used to boast of a vibrant manufacturing sector which employed a significant number of workers with strong backward and forward linkages with the rest of the economy, but the country has witnessed massive deindustrialisation over the past two decades.
Some of the companies that once anchored the economy include David Whitehead Textiles, Cold Storage Company, Border Timbers, Railways of the Zimbabwe, Hwange Colliery and the Zimbabwe Iron and Steel Company, among others.
“Furthermore, government will advance the ongoing State -owned enterprise reforms to improve service delivery and reduce the financial burden on the fiscus,” he said.
He pointed out that the solution to the current account deficit lies in value addition and beneficiation, so that the country earns higher value on the foreign market.
“High levels of formal unemployment can also be easily addressed by resuscitation of the manufacturing sector,” he said.