Harare- The African Development Bank (AfDB) says sanctions imposed on Zimbabwe by western countries have massively contributed to the Southern African country’s failure to service loans provided by International Financial Institutions over the years.
According to official statistics, Zimbabwe’s total Public and Publicly Guaranteed external debt, as at end of September 2022 was estimated at US$14.04 billion.
While some movement has been made towards servicing some of the country’s foreign debt, the payments have largely been of a token nature.
As a result, most international lenders have stopped giving fresh loans to the country until it clears its previous debts, a condition Zimbabwe has been unable to meet.
However, while Zimbabwe has declared its intention to resolve its debt challenges, AfDB president Dr Akinwumi Adesina, who is championing Zimbabwe’s debt resolution plan, said sanctions were a huge impediment towards achieving this.
“We gather here mindful that over 20 years of sanctions have hurt Zimbabwe and the people of Zimbabwe. The sanctions have led to arrears and debt accumulation.
“While token payments are being made to service the debt, it is now time for a comprehensive arrears’ clearance, debt resolution and debt restructuring for Zimbabwe. Zimbabwe cannot run up a steep hill of economic recovery carrying a heavy backpack of debt on its back,” he told delegates at the second Arrears clearance and debt resolution forum held in Harare.
“The people of Zimbabwe have suffered enough. The young people of Zimbabwe deserve to have their once prosperous country back. They cannot continue to suffer for a past they did not create.
They deserve a new and prosperous future. It is time now to rebuild what has been broken; it is now time to refrain from casting stones; it is now time to heal; it is now time for peace.”
Adesina said sanctions had also ravaged strategic sectors of Zimbabwe’s economy, with ripple effects being felt across the southern African region.
As such, he said, it was
“The once thriving private sector of Zimbabwe has imploded. International banking has almost dried up with 102 correspondence banking relations lost in the past one decade. Today, 90 percent of the economy is now informal.
“Zimbabwe’s once thriving contribution as the nerve center of the SADC region has been broken, lowering regional trade and investments. The once thriving National Railways of Zimbabwe, with a rolling stock of 12.5 million tons in the 1990s now accounts for under 2.5 million tons,” he said.
While the challenges that Zimbabwe has faced are huge, Adesina said Zimbabwean people and the government had shown that these were not insurmountable.
He commended the “significant” economic reforms that have been implemented by the government, to stabilise the macroeconomic environment.
He said these were manifesting in the good performance of sectors such as agriculture and new investments in mining.
“The green shoots are coming back, but much still needs to be done. That is why I accepted the invitation from President Mnangagwa for me to play the role of Champion for arrears clearance and debt resolution for Zimbabwe.
“I accepted because I know the potential of Zimbabwe. I lived and worked here and was here during the challenging times of the late 1990s to 2003. I know Zimbabwe. I love Zimbabwe. I accepted because I see that the time is now for us to all work together to build a new and prosperous Zimbabwe,” he said.
Regarding his engagements with creditors and development partners, Adesina said these had so far been promising.
“In my meetings with several development partners over breakfast in the home of the German Ambassador, I sensed an openness and readiness to engage in dialogue focused on solutions,” he said.
“In my role as Champion of the arrear’s clearance and debt resolution for Zimbabwe, I will be open to all, hear all, and together with you, President Mnangagwa and President (Joachim) Chisanno, we will take all on board.
“To move this process forward, the African Development Bank approved $4.1 million for an Arrears Clearance and Governance Enhancement Project. This is supporting the dialogue platform and the works of President Chissano, the facilitator, Dr Luisa Diogo, former Prime Minister of Mozambique, the Senior Technical Advisor, as well as two technical advisors, Dr Alexis Ferrand (Economic Advisor) and Dr James Tsabora (Governance Advisor) who are supporting economic and governance working groups.”
Meanwhile, facilitator of the debt resolution plan, former President Chisanno highlighted the importance of dialogue in Zimbabwe’s debt resolution plan.
“The ongoing reform process embodied in the structured dialogue platform requires the building of trust between the government of Zimbabwe and its development partners. This is so critical in the current situation where such trust has been broken due to decades of political mistrust, mutual blame, and quite often acrimonious relationship between the parties,” he said.
“History is there but should not hold the process hostage, it should be set aside and allow for a reengagement process that is anchored in the pursuit of dialogue and building of trust.”
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