HARARE Zimbabwes total debt, including domestic and external arrears has shot up to nearly US$6 billion, the central bank figures show. According to the Reserve Bank of Zimbabwe, the debt as at end of March was US$5.84 billion up from US$5.7 billion in January.
The central bank figures reflect that of the total debt, US$5.3 billion is external while US$513 million represents domestic liabilities.
Last month, Finance Minister Tendai Biti warned that the country would not have any support from external partners, thereby limiting Zimbabwe’s capacity for any infrastructural development.
Analysts say the huge debt is increasing the countrys credit risk profile while undermining investment and growth. Zimbabwe currently needs up to US$10 billion for economic recovery, according to Kingdom Stock Brokers.
It is officially estimated the country needs US$45 billion over the next 10 years to recover to 1997 Gross Domestic Product (GDP) levels,” Kingdom said, adding; “Lack of funding has forced both the IMF and minister of finance revising the countrys growth figures downward.
According to the International Monetary Fund (IMF)’s World Economic Outlook report released last month, Zimbabwes economy, which the fund has maintained remains fragile despite showing signs of recovery last year, is now expected to post a 2.2 percent growth down from 6 percent the multilateral funder had initially predicted the economy to grow by.
The fund projects that Zimbabwe’s economy would register 0 percent growth in 2011. Biti also said the government was likely to revise economic growth forecast from the 7.7 percent to 4.8 percent.
Biti blamed the slow down in economic growth on political uncertainty which he said had kept away foreign donor support, with government having to date received only US$2.9 million out of the US$810 million it expects from donors this year.
The southern African countrys economy registered its first growth in a decade last year after a new coalition government between President Robert Mugabe’s Zanu (PF) party and Prime Minister Morgan Tsvangirai’s MDC implemented measures, including the adoption of multiple currencies that doused hyperinflation.
Gross Domestic Product (GDP) last year grew by 5.1 percent compared to an earlier projection of 4.7 percent, but the economy has since then suffered because of unending political disputes between the two main parties that are holding back badly needed foreign investment and donor support.
A controversial plan to force foreign-owned firms to transfer 51 percent stake to blacks over the next five years is expected to inflict further damage to the limping economy.
Zanu (PF) backs the plan and wants it implemented immediately, while the MDC wants the scheme suspended to allow for more consultation and the drafting of new empowerment regulations that will not scare away business leaving investors caught in the middle.
Post published in: News