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RBZ Deputy Governor Dr Kupukile Mlambo

Oliver Kazunga, Senior Reporter
ZIMBABWE expects to secure about $2 billion in external lines of credit from three preferred creditors once Government clears the outstanding arrears to foreign lenders, an official said.

The country has tabled a $1.7 billion debt clearance plan to the World Bank and the Africa Development Bank (AfDB), which has already been approved.

The clearing of the arrears is expected to reduce country risk and open fresh avenues for credit from external private lenders.

Zimbabwe’s three preferred creditors are the African Development Bank (AfDB), World Bank and the International Monetary Fund (IMF). Last October Zimbabwe paid $107,9 million it owed to IMF. The AfDB and World Bank are owed a combined $1,7 billion. A preferred creditor is a creditor receiving a preferential right to payment upon the debtor’s bankruptcy under applicable insolvency laws.

Reserve Bank of Zimbabwe (RBZ) Deputy Governor Dr Khupukile Mlambo said re-engagement with the international financers was crucial in attracting lines of credit and turning the economy around.

“We have been very serious about reengaging the international community and people say ‘oh but Chinamasa (Finance and Economic Development Minister) is coming without money from IMF’. . . But the challenge is that there is something called the preferred creditors (IMF, World Bank and AfDB) . . . and you do not get a loan from any of them if you owe one of them,” he said.

“We now need to clear both the AfDB and World Bank. We have cleared the IMF loan but the AfDB and World Bank loans are still outstanding.”

RBZ Governor Dr John Mangudya was in Washington DC, two weeks ago where he attended the traditional IMF and World Bank Spring meetings.

“I am sure he (Dr Mangudya) will share with you through the media what they discussed . . . but once we clear both the AfDB and World Bank arrears we expect to get in the region of at least $2 billion from the international community,” said Dr Mlambo.

Efforts to get a comment from Dr Mangudya were fruitless as his mobile phone went unanswered by the time of going to print yesterday.

Should the country get the fresh and cheaper credit lines from the international community, Treasury intends to channel the resources into the productive sectors.

In an update on the country’s re-engagement programme with international financiers, Minister Patrick Chinamasa last week said the country has met all the necessary conditions to the repayment of debt arrears to the World Bank and AfDB.

@okazunga