By a correspondent
Deputy Finance Minister Clemence Chiduwa says Zimbabwe’s external debt and accompanying penalties are suffocating the country’s economic progress.
Addressing the 4th Zimbabwe Debt Conference in Bulawayo on Thursday, Chiduwa said the country continued to grapple with an unsustainable debt burden, which is estimated at US$16.7 billion (61.6 percent of GDP), as at the end of June 2022.
“Of this total Public and Publicly Guaranteed (PPG) debt, US$13.2 billion is external debt while US$3.5 billion is domestic debt,” he said.
Chiduwa said the Arrears Clearance, Debt Relief and Restructuring Strategy, launched in 2022, has been shared with various development partners including the International Monetary Fund (IMF), World Bank Group, African Development Bank and ambassadors accredited to Zimbabwe.
“The strategy outlines and explores possible debt resolution options under the HIPC Initiative and non- HIPC Initiative scenarios. The HIPC Initiative option and process would allow the country to benefit from maximum debt relief,” he said.
Chiduwa said Zimbabwe was keen to undertake the HIPC initiative if the window for eligibility is availed, adding that the country will be exploring this with the assistance of the World Bank Group, as well as support from the G7 members who are also Paris Club members.
Should the HIPC initiative be not available, he said Government will still seek to utilise a combination of its own resources and bridge concessional financing to clear arrears to the international financial institutions.
Chiduwa said the domestic debt was comprised of US$3.5 billion compensation for former farm owners, US$38 million Treasury Bills, US$37 million Treasury Bonds and US$10 million owed to domestic service providers.
He said the existence of these arrears and penalties remain an albatross to the achievement of the National Development Strategy (NDS 1) objectives and the attainment of Vision 2030 of becoming an upper middle-income economy.
“Government remains committed to the engagement and re-engagement with the international community and creditors for debt resolution and arrears clearance as pronounced in the NDS 1,” said Chiduwa.
