Measures to clear the US$4, 7 billion dollar external debt

tendai_biti_adressingTHE Government will next year set up an external debt management that would facilitate the country to clear its external debt amounting to US$4, 7 billion, a Cabinet Minister has announced. (Pictured: Finance Minister Tendai Biti)

While presenting the 2010 National Budget yesterday, Finance Minister Tendai Biti said Zimbabwe’s total external debt including arrears amounted to US$4.7 billion as at 31 December 2008.

“Of this total debt, Government owed US$3.6 billion, with the rest owed by parastatals and the private sector,” he said. He said clearance of the outstanding arrears was critical for unlocking new financing for the country’s recovery programme.

Minister Biti said given that the country did not have the capacity to repay its external payment obligations, Government had initiated the assistance of international cooperating partners with debt relief and write offs as part of the re-engagement process with multilateral and bilateral creditors. “In this regard, Government is currently carrying out a debt reconciliation exercise with external creditors, critical for consideration of the country’s arrears clearance strategy and eligibility for external debt relief. “Already, with the assistance of the African Development Bank (ADB), the Government has contracted a debt expert to support the Government in formulating the external debt and arrears clearance strategy, which will form the basis for debt relief,” said Mr Biti.

He also said the country was engaged with the World Bank for assistance in clearing multilateral arrears and benefiting from debt relief under the framework of the Highly Indebted Poor Countries (HIPC) initiative and the Multilateral Debt Relief Initiative (MDRI).

“Already, work is underway to meet some of the conditionalities for HIPC eligibility, such as demonstration that our debt burden is unsustainable and establishing a track record of reform and sound policies through the IMF and IDA supported programmes,” he said.

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