HARARE, March 13 — Finance Minister Patrick Chinamasa has stated that re-engaging external creditors to enable Zimbabwe to obtain fresh loans is the best way out of 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 which are blocking the government from improving living conditions for the majority.

Chinamasa told students attending the Joint Command Course at the Zimbabwe Staff College here this week that the government was making serious inroads in re-engaging major creditors, including multilateral institutions such as the World Bank and the International Monetary Fund (IMF), to allow the country to access fresh funding.

Zimbabwe’s external debt stood at 6.8 billion US dollars 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,” 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.”

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 a little,” he said.

“Wherever we go (to look for funding), we are owing something,” he said, adding that as a result of the country’s debts, Zimbabwe was failing to benefit from concessionary funding being provided by multilateral institutions as well as what was 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.

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, 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 (MW) to 2,450 MW by 2018.

Chinamasa said the government was also synchronizing its economic policies and was also pushing for value addition and processing 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.

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