Zimbabwe has put its focus on the repayment of arrears owed to debtors in order to be eligible to receive more funds, increasing the country's dept to more than $10 billion.
At the October 26 meetings, the boards of the African Development Bank, the World Bank and the International Monetary Fund are expected to consider Zimbabwe for a funding programme and therefore it is imperative for the country to have cleared the $1,8 billion arrears to show commitment to dealing with the debt overhang.
Zimbabwe owes multilateral and bilateral creditors about $10 billion but arrears have run into $1,8 billion.
Presenting a paper at the ongoing Confederation of Zimbabwe Industries 2016 congress, Reserve Bank of Zimbabwe Governor John Mangudya said clearing arrears could solicit a favourable response from the IFIs.
“I understand that the boards of African Development Bank and IMF will meet sometime in October. We need to show commitment to these boards. We cannot get any money before we clear our arrears.
“The boards will meet to consider whether Zimbabwe can qualify under Pillar 2, which is sometimes called a Fragile State Facility. There are only four African states which are considered as fragile states.
“The three others are Eritrea, Sudan and Somalia. We may qualify under Pillar 2. However, we need to show commitment by paying our arrears
“For the IMF we cannot get money without paying so we need to have a business plan for Zimbabwe. We are trying to cleanse the balance sheet of Zimbabwe. Our wish and prayer is that we should pay just before the board meeting.”
- Herald
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