Home » Governance » Govt Moves to Re-Engage External Creditors

Finance Minister Patrick Chinamasa said yesterday re-engaging external creditors to enable Zimbabwe to get fresh loans is the best way out of the economic challenges the country is going through. The Zimbabwean economy has been under a relentless onslaught by Western countries which has led to a plethora of challenges, primarily a high debt burden and liquidity constraints that are blocking the Government from improving conditions of living for the majority.

Minister Chinamasa told students attending the Joint Command Course at the Zimbabwe Defence Staff College that the Government was making serious inroads in re-engaging major creditors who include multilateral institutions such as the World Bank and the International Monetary Fund to allow the country to access fresh funding.

Zimbabwe’s external debt stood at $6,8 billion at the end of December last year.

“What this economy requires is fresh money and we can only get it from people we owe money,” Minister Chinamasa said.

“That is why we are engaging the institutions to unlock new money to fuel economic growth. Unless we do that, we have a problem.”

Minister Chinamasa said the country did not have capacity to pay the debt but still required fresh funding to get going to be in a position to repay the loans.

“We do not have capacity to even suggest to pay little,” he said.

“Wherever we go (to look for funding), we are owing something.”

He said as a result of the debt, Zimbabwe was failing to benefit from concessionary funding availed by multilateral institutions as well as that available on the global capital markets.

The country, he said, was making progress in re-engaging especially the IMF and the World Bank which he described as “economic doctors” for all the economies in the world.

Minister Chinamasa said Western- imposed sanctions remained a major obstacle on the ability of the economy to attract new investment and support from outsiders.

Besides re-engagement, Minister Chinamasa said the Government was working on initiatives to improve the country’s basic infrastructure which was critical to attracting investment into the economy.

Such basic infrastructure included power, which was currently in short supply, with initiatives underway to boost generation from the current 1 100 megawatts to 2 450MW by 2018.

Minister Chinamasa said the Government was also synchronising its economic policies and was also pushing for value addition and beneficiation of natural resources to boost income from exports.

“Value addition can be propelled by rebuilding our infrastructure and stimulating production in various sectors of the economy,” he said.

Minister Chinamasa said Zimbabwe’s development prospects remained “favourable in light of initiatives that Government is undertaking”.

Source : The Herald