Zimpapers Logo

Oliver Kazunga, Senior Business Reporter
ZIMBABWE remains committed to paying more than $1 billion in debt owed to the World Bank and the African Development Bank as this is crucial in unlocking fresh lines of credit once the arrears are cleared, Treasury has said.

The Permanent Secretary in the Ministry of Finance and Economic Development, Mr Willard Manungo, said in an interview on the sidelines of the ongoing Ad-hoc expert group meeting on Tripartite Free Trade Area in Bulawayo, that the country was taking foreign debt clearance seriously.

Last October, Zimbabwe signed in Lima, Peru, a debt clearing strategy with international financial institutions to clear $110 million owed to the International Monetary Fund (IMF), World Bank ($1.15 billion) and $601 million to the African Development Bank (AfDB). Zimbabwe has since cleared the IMF debt.

“What remains outstanding are the obligations to the World Bank, so we are looking at just over $1 billion then we also have over $500 million that is due to the AfDB. But the AfDB has been ready to overcome our arrears and basically they are using a rule that requires us to pay the World Bank first,” said Mr Manungo.

“We have been having challenges with the World Bank and at the moment there are still some discussions that we are having with them, but as Zimbabwe we are ready to pay them and AfDB requires that we address World Bank then address theirs.” Mr Manungo was part of the delegation that included Reserve Bank of Zimbabwe Governor, Dr John Mangudya, that attended a recent IMF and World Bank statutory annual meeting held every October in Washington DC.

He said the World Bank remains reluctant to refinance Zimbabwe even if the country clears its arrears and this was the reason holding back the Government from settling the debt.

“We were ready to pay the arrears and initially there was reluctance on the part of the World Bank to be paid because they were not ready to be able to refinance us. We are saying as we pay what we owe you, it should be able to open new windows for new financing opportunities and they are not ready,” said Mr Manungo.

In May, the Government secured a syndicated loan put together by the African Export-Import Bank, which enables the country to clear World Bank and African Development Bank (AfDB) arrears.

@okazunga