Zimbabwe commits to prudent debt control
Hatred Zenenga in NEW YORK
ZIMBABWE is committed to prudent debt management practices to ensure the economy is not choked by unsustainably high debt, President Mnangagwa said yesterday.
Speaking at the high-level dialogue on financing for development held under the theme: “Fostering debt sustainability and strengthening the global financial safety net”, at the United Nations headquarters, the President said it was regrettable that public debt had risen in recent years because of a number of global shocks related to the negative impact of climate change, the Covid-19 pandemic, conflict and changes in commodity prices, among other factors.
He noted that the burden of unsustainable debt threatens the prospects of sustainable development, particularly in low and middle-income countries, and called for urgent collaborative action in fostering debt sustainability and strengthening global financial safety nets.
“My Government reaffirms its commitment to prudent debt management practices. We continue to emphasise transparency, accountability as well as responsible lending and borrowing as essential principles for debt sustainability,” said President Mnangagwa.
“Institutions that support democracy are being strengthened and we remain committed to clearing our debt arrears.
“Zimbabwe is actively engaging with international financial institutions and our development partners to explore innovative mechanisms for enhancing financial safety nets, particularly in times of economic distress.”
In that regard, the Government made a deliberate decision to establish the Structured Debt Resolution and Arrears Clearance platform in December last year, which institutionalised the country’s dialogue around debt and arrears issues.
The Structured Debt Resolution and Arrears Clearance platform is led by African Development Bank (AfDB) president Dr Akinwumi Adesina, who is the Champion of the process, with former Mozambique President Joaquim Chissano being the High-Level facilitator.
About five engagements have so far been held with creditors, including during the AfDB annual general meetings in Egypt in May, as Harare sought to demonstrate to creditors that it is determined to address its obligations.
Zimbabwe’s consolidated debt amounts to US$17,5 billion.
Debt owed to international creditors stands at US$14,04 billion while domestic debt is US$3,4 billion, with debt owed to bilateral creditors estimated at US$5,75 billion, and debt to multilateral creditors is estimated at US$2,5 billion.
President Mnangagwa said Zimbabwe acknowledges the importance of strengthening the global financial safety net to mitigate the adverse effects of financial crises on the most vulnerable nations.
“Zimbabwe, therefore, supports the calls by the UN Secretary General, Antonio Guterres, for the reform of the global financial architecture.
“We equally support his proposed SDG Stimulus to scale-up affordable long-term financing for countries in need,” he said.
“Private finance and innovative partnerships are key towards scaling up the achievement of Sustainable Development Goals and must equally be prioritised”.
President Mnangagwa also called upon all stakeholders to join hands in Zimbabwe’s shared pursuit of debt sustainability and the strengthening of the global financial safety net.