The infamous International Monetary Fund (IMF) staff monitored programs have returned as the country seeks to pave way for debt clearance through sponsorship.
Zimbabwe’s total debt currently stands at US$10 billion, but the original sum borrowed stood at US$4 billion. The rising interest on the principal amount borrowed will divert fiscal revenue from expenditure in health, social services and infrastructure among other key sectors.
Minister of Finance Prof. Mthuli Ncube is in Washington DC, United States, where he is attending the World Bank meeting as a member country and has had re-engagement meetings with various lenders.
Speaking from Washington DC, the minister said, “The country has been making token payments to its creditors who have expressed their gratitude to the gesture, but our hope and wish is to expunge the total debt.”
Prof. Ncube said the country is working on a debt clearance pathway with its creditors which involves staff monitored programs in order to find a sponsor who can repay the country’s debt to the IFIs.
Debt sponsorship is when a country finds another country to pay off its debt from the IFIs and in turn get a ‘soft’ loan to use to repay part of the sponsorship debt. This gives the country a more favourable platform to borrow than getting expensive loans from bilateral lenders.
AfDB President Dr. Akinwumi Adesina will be in Zimbabwe next month for a debt repayment structure as he volunteered to be the principal monitor of the country’s plans on expunging its debt.
The development was communicated by the Minister of Finance Prof. Mthuli Ncube, who met the AfDB President in Washington DC, USA where they are currently attending the World Bank members meeting.
“The President of the AfDB will be in the country next month as he has put himself forward as a candidate to help the country come up with good staff monitored programmes which also include the International Monetary Fund (IMF),” Minister Ncube said.
The debts that Zimbabwe owes to Bretton Woods institution, AfDB and the Paris Club has long limited their capacity to get external development finance. This in turn defeats the idea of market liberalism and export diversification strongly advocated for by these international lenders – Harare