Zim debt to hit US$7bn: Think-tank

us_dollars_cashHARARE Zimbabwes external debt could shoot to US$7 billion by 2011 unless the countrys power-sharing government moves urgently to persuade multilateral lenders and others it owes money to forgive or cancel all or part of the debt, a local think-tank said on Tuesday.

The Zimbabwe Coalition on Debt and Development (ZIMCODD) said at US$5 255 billion Zimbabwes foreign debt was unsustainably high and would remain a block to key lenders such as the International Monetary Fund (IMF) from providing loans, badly needed to finance reconstruction of the countrys collapsed economy.

Zimbabwe is saddled with an unsustainably high level of external debt, estimated to be in the region of US$5 billion . . . the bulk of which is owed to multilateral funding agencies is expected to grow to US$7 billion by 2011, ZIMCODD said at a conference to review the countrys foreign debt.

The IMF has announced that there are many outstanding issues (including outstanding debt), which need to be solved before it and other multilateral finding agencies resume financial assistance to Zimbabwe, added ZIMCODD.

However a senior member of Prime Minister Morgan Tsvangirai told the conference that the power-sharing government that took office only five months ago should commission an audit to establish whether all debt incurred by the previous administration was for the benefit of the nation.

Obert Gutu, a trained lawyer and a Senator, said: There is an urgent need to interrogate the internal and external debt and see how that colossal debt was incurred in the first place.

Why should we make a commitment to pay when we do not know how the debt was incurred? I told Biti (Tendai, Minister of Finance) to make sure that we have a debt audit before we pay.

Biti had earlier on told the meeting that the country had no capacity to timeously settle all its debt.

Zimbabwe, once one of Africas most vibrant economies, is said to owe US$138 million to the IMF, $676 million to the World Bank and 438 million the African Development Bank, among other lenders.

However, the power-sharing government of President Robert Mugabe and Prime Minister Morgan Tsvangirai says it needs more loans US$10 billion in total to revive the economy and generate revenue before it is able to repay what it owes.

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