Zim debt exaggerated: Chinamasa


HARARE – Finance minister Patrick Chinamasa claims Zimbabwe’s debt is much lower that reported.

The country’s debt has been estimated at more than $11 billion.

“We are currently verifying the size of our external debt and we are doing so with the creditors to agree the figures as to what we owe so  that at least we know where we stand as a country,” said Chinamasa at the  launch of a new logo and newsletter for the renamed Securities and Exchange Commission of Zimbabwe on Wednesday.

“Indications are that it’s much lower than what the media has been writing. The media has been putting it at $10,7 billion or $11 billion, no its much less. We are looking at around $6 billion to $7 billion,” the Treasury chief said.

He said government is currently engaging International Monetary Fund (IMF) towards revising the country’s debt overhang estimated at $10,7 billion.

He added that during his meetings with the World Bank and the IMF he had pointed out that Zimbabwe had no capacity to pay the principal debt and global financiers had all nodded in agreement.

Chinamasa also noted that the country had accumulated arrears of around $4 billion and had no capacity to clear those arrears to which the multi-lateral financial institutions also acknowledged.

“We are currently paying token payments per month towards those arrears of $150 000 and as the bankers here will know, it will take us a lifetime or rather more than a lifetime to clear those arrears.

“We also said to them for the first that whilst we are in this situation as a cost to our reassertion of our rights over our natural resources, we have enormous potential as country. In fact they said Zimbabwe is among the top  five countries that are going to be target to international inflows of  investment if we play our cards right and put our act together,” said Chinamasa.

The Treasury chief said that Zimbabwe was currently under a Staff Monitored Programme (SMP) — an informal agreement to monitor the government’s economic programme but that does not involve financial assistance — which meant that the country is unable to access the benefits of membership for concessionary lending or borrowing creating a standstill with the global financiers.

“I have been putting these ideas to them that a creditor who wants to be paid will certainly capacitate the debtor to build his capacity so that he can pay back. We need to be capacitated and we need new money,” said Chinamasa.

He noted that the Bretton Woods institution was not in disagreement with that position but was bound by rules and that they were not flexible.

“We now have to speak the language that will attract that capital. We have to behave in a manner that will make Zimbabwe an attractive destination for capital inflows,” said Chinamasa.

On Wednesday the IMF team began talks with government officials amid signs that President Robert Mugabe could take a more accommodating approach to the ownership of foreign companies.

It is the first visit by an IMF team since Mugabe and his Zanu PF party won the disputed July 31 election with a mandate to kick-start the flagging economy and pledges to push ahead with controversial indigenisation policies.

However, the government and IMF are still not likely to find it easy to reach an agreement on budgetary issues, given Zanu PF’s expansionist election campaign manifesto that included a commitment to raise civil service salaries.

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