HARARE, July 4 – The Zimbabwe government has completed an audit of its debt and has established an office to manage the debt, which stood at 9.9 billion US dollars at the end of December last year, says Finance Minister Patrick Chinamasa.

Of the total debt, 8.9 billion USD are owed to external creditors, with the remainder owed to domestic lenders, says Chinamasa, who adds that clearing the debt will be “a very long road” as the government grapples with efforts to raise fresh capital to finance economic development.

“I have no capacity to pay the arrears and the principal debt,” Chinamasa said here Thursday, adding that the government was engaging the creditors with a view to finding an amicable solution to the debt crisis.
“What I want is new money to build capacity to pay,” he said.

He added that the bulk of the date was incurred in the early 1980s and part of it before Zimbabwe became independent in 1980.

An audit completed recently shows that multilateral finance institutions that the country owes money to include the World Bank at 1.0 billion USD, tje African Development Bank (612 million USD), the European Investment Bank (280 million USD) and the International Monetary Fund (121 million USD).

Individual countries Zimbabwe owed money to include Germany (851 million USD), France (534 million USD), Britain (388 million USD), Japan (348 million USD) and the United States (243 million USD).

The country’s debt also includes private sector external arrears of 1.95 billion USD which Chinamasa said was being serviced by the various companies.

Chinamasa said resolving the debt crisis would enable the government to fund projects under its new economic blueprint, the Zimbabwe Agenda for Socio Economic Transformation (Zim Asset). “This will also improve the country’s credit rating and in the process attract new foreign direct investment,” he said.

The government requires 27 billion USD to fund projects under the economic blueprint Zim Asset in the next five years.

The newly established debt management office, which comes under the Finance Ministry’s permanent secretary, would be tasked with monitoring current debt and taking charge of new debts that are
incurred. It will also be tasked with preparing medium term management strategies, annual borrowing plans and participating in negotiations with creditors.

Chinamasa said a broad number of measures such as centralising borrowing powers to the Ministry of Finance would be implemented to address accrual of new unapproved debt by the government, parastatals
and other public enterprises.

He said the government would also limit exposure through limiting guarantees for private sector borrowings unless they were of critical national importance.