Zim needs debt moratorium: ZIMCODD

tendai_biti__jean_louis_ekraHARARE Zimbabwe should urgently seek a moratorium on repayments to arrest ballooning interest on its nearly US$7 debt, according to the Zimbabwe Coalition on Debt and Development (ZIMCODD). (Pictured: Finance Minister Tendai Biti (left) with African Export Impor

The country is sitting on a US$6.7 billion debt owed to various international creditors. According to Finance Minister Tendai Biti the debt is racking up US$300 million annually to increase the countrys credit risk profile while undermining investment and growth.

In a paper released last week, the ZIMCODD said a probe by Parliament to establish legitimate debt should follow a moratorium on repayments.

“We call on creditors to take note of their own multilateral development commitments such as MDGs and international protocols that guarantee social and economic rights of the people in dealing with the Zimbabwe debt,” the Zimcodd said.

“They (creditors) must immediately introduce a moratorium on debt service, to arrest the growth of interest payments and penalties on the debt which is unpayable because of the current state of the economy. This should be followed by a parliamentary audit of current debts.

The social and economic justice campaigner appeared to shoot down calls by Biti and supported by the International Monetary Fund (IMF) for Zimbabwe to seek reclassification as a Highly Indebted and Poor Country (HIPC) to qualify for debt restructuring and forgiveness.

We also reiterate that debt relief programmes such as HIPC are no substitute for total debt cancellation,” the ZIMCODD said.

Zimbabwes Cabinet is expected to debate a possible new debt strategy although Biti insists that the government has developed a new hybrid programme to address burgeoning debt.

External debt is projected to grow to US$7.6 billion by the end of 2010, whilst domestic debt will grow to US$1billion in the same period.

The IMF, World Bank and other multilateral lending institutions have told Harare to first clear its arrears with the organisations before they can entertain any request for budgetary assistance.

Zimbabwe, still smarting from nearly a decade of international isolation and poor policies, desperately requires external support for reconstruction. The government has said it requires US$10 billion in foreign funding to put the economy on a sustainable path to recovery.

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