Story by Owen Mandovha
THE Second Republic has successfully crafted a Debt and Arrears Clearance Plan considered as the perfect roadmap to overcome the country’s economic growth impediments.
The latest statistics released by the Ministry of Finance and Investment Promotion indicate that Zimbabwe’s external debt to the World Bank and International Monetary Fund (IMF), had not been serviced for close to two decades and remained an albatross to the economy.
This heightened the country’s risk, thus blocking key lines of international credit required to grow the economy.
Government has however come up with a solid debt clearance strategy that is beginning to pay off.
“Zimbabwe has been pursuing debt clearance to international creditors with limited success including in 2010 when it came up with the Sustainable and Holistic Debt Clearance Strategy, in 2015 it came up with the Lima Strategy based on the non HIPC approach. Zimbabwe’s total debt is at over US$17,5 billion of which much of that are arrears emanating from us not servicing our debts.
“US$14 billion of that is owed to international creditors and development partners. There has not been any successful roadmap to overcome this impediment which has been a burden to Zimbabwe’s economic development,” said an economist, Dr Prosper Chitambara.
The diplomatic victory by government to create a structured debt resolution championed by African Development Bank President Dr Akinwumi Adesina has given confidence to global partners and creditors on Zimbabwe’s economic reform process.
“The Debt Resolution Platform which has got former Mozambican President Joachim Chissano as a high level facilitator and AFDB President Dr Adesina as the champion of the process has been a very successful platform to engage with multilateral institutions and creditors on a high level platform something which has not been pursued for over close to two decades. There is now clearly a roadmap as Zimbabwe has started making token payments to creditors which is a huge boost to debt and Arrears Clearance,” he added.
Economist Persistence Gwanyanya weighed in saying the High Level Structured Debt Resolution Platform has been an effective tool to reset Zimbabwe’s international relations through engagement and re-engagement.
“Government has scored a first in terms of creating an ideal to not only deal with its debt problem but also this has worked effectively in its engagement and re-engagement policy thrust by bringing partners and countries including those in the European Union to come to the table and discuss the Zimbabwean issue of debt but not only that but to find a common ground of relating with each other as a community of nations,” said Gwanyanya.
As the Debt and Arrears Clearance Plan remains on course, there is a clear roadmap on how government seeks to extinguish its domestic and external debt of over US$17 billion for the successful implementation of economic growth plans under the National Development Strategy One.