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Minister Chinamasa

THE Government is working with creditors to ascertain the exact amount the country owes, which has tended to be overstated, a Cabinet minister said last week. The ballooning debt, which has blocked the country’s ability to access external concessionary finances leading to a liquidity crisis, has been estimated at over $10 billion.

But Finance and Economic Development Minister Patrick Chinamasa said the country’s debt was between $6 and $7 billion.
“We are currently verifying the size of our external debt. And we are doing so with the creditors, to agree on the figures as to what we owe, so that at least we know where we stand as a country,” he said.

“The media has been putting it at $10,7 billion or $11 billion, but it is much less. We are looking at around $6 to $7 billion.”
Minister Chinamasa was addressing guests at a function to launch the Zimbabwe Securities and Exchange Commission (formerly the Zimbabwe Securities Commission) and its newsletter.

Zimbabwe owes multilateral institutions such as the International Monetary Fund (IMF), the World Bank and International Finance Corporation.

The country, currently blocked from accessing any financial support from the Bretton Woods institutions, is implementing an IMF staff monitored programme which if successful, would result in the Southern African nation benefitting from the institution’s financial programmes.

Minister Chinamasa, who met with IMF officials on Wednesday, reiterated that Zimbabwe did not have the capacity to repay the debt and had proffered new suggestions on the way forward.

“When all is said and considered, we are under a staff monitored programme which means we are unable to access benefits of our membership for concessional borrowing. Because they are not giving us those benefits, it means we remain at a standstill which is not good even for the creditors,” he said.

“A creditor who wants to be paid will certainly capacitate the debtor to build his capacity to pay back,” he said.
He said Zimbabwe was currently paying token payments of around $150 000 per month towards settling the debt.

“Bankers will know it will take us a lifetime or more than a lifetime to clear those arrears,” he said.
Earlier, Minister Chinamasa had told Parliament that Zimbabwe would only be able to pay its debt if the multilateral lenders helped the country to build its capacity to repay.

With support, the country had potential to revive its fortunes, he said.
“We are among the top five countries that are going to be targets for international capital inflows if we play our cards right,” Chinamasa said.

“We need new money.”
He said the multilateral lenders must be “be flexible and look at our situation as a unique one.”
Zimbabwe is under Western imposed sanctions, which have also contributed to the country’s failure to access support from the Bretton Woods institutions as the embargo blocks any possible extension of finances to the country. – New Ziana