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Mugabe's Zimbabwe to get $1 billion Afreximbank loan
10 Jul 2016 at 10:21hrs | Views
Zimbabwe is set to secure close to $1 billion in loans from the African Export-Import Bank (Afreximbank) aimed at clearing the country's $1,8 billion arrears to multilateral institutions, the central bank governor has said.
Reserve Bank of Zimbabwe governor John Mangudya told the media in London, where he is meeting potential foreign investors, that clearing arrears to the International Monetary Fund (IMF), the World Bank and the African Development Bank will make the country attractive to foreign capital.
"What we can tell you is that, obviously, if things move well, we're expecting balance of payments support from the IMF," he said.
This comes as the country — desperate to re-engage with western multilateral institutions after years of isolation — is hopeful to have paid back all its arrears in time for the September board meetings of the IMF and the African Development Bank.
Economic analysts said Zimbabwe's foreign and domestic debt, currently hovering over $10 billion, has undermined the country's creditworthiness and compromised its ability to secure new funding due to the fact that most of it is now in arrears.
Finance minister Patrick Chinamasa, who is also in London to drum-up foreign direct investment support for Zimbabwe's dying economy, said the whole point of the rapprochement, after 16 years of being shut out of international lending, was to receive new funds.
"For us to turn round the fortunes of our country we need new money," he said, adding that manufacturing "was on its back" and government finances severely strained.
A long-time ally of President Robert Mugabe whose tenure at the helm of Treasury has turned him into a pragmatic economist, Chinamasa said some of the money would be put into agriculture, which has been starved of funds.
Zimbabwe degenerated into economic chaos after Mugabe implemented a controversial land reform programme around 2000, which led to the seizure of white-owned commercial farms.
The land grabs, human rights abuses and violent, disputed elections saw western nations cut off aid to Zimbabwe and impose sanctions on the nonagenarian leader and other members of his ruling Zanu-PF party.
But now western diplomats are seeking to avert a deepening economic crisis, amid concerns about what could happen when Mugabe dies or leaves office.
Zimbabwe's economy is slowing down due to lack of foreign investment, electricity shortages and expensive loans. Cheaper imports are damaging local industry, forcing firms to close.
This has seen the government failing to meet its monthly obligations, a situation that has fuelled a series of rare protests, as well as a strike by teachers, doctors and nurses over unpaid salaries.
Chinamasa said Washington had become more sympathetic to the idea of a rapprochement with Zimbabwe, although an American official said the US remained opposed to a deal with the IMF.
Zimbabwe has been in arrears to the IMF, to the tune of $111 million, since 2001, and owes the World Bank more than $1 billion.
Reserve Bank of Zimbabwe governor John Mangudya told the media in London, where he is meeting potential foreign investors, that clearing arrears to the International Monetary Fund (IMF), the World Bank and the African Development Bank will make the country attractive to foreign capital.
"What we can tell you is that, obviously, if things move well, we're expecting balance of payments support from the IMF," he said.
This comes as the country — desperate to re-engage with western multilateral institutions after years of isolation — is hopeful to have paid back all its arrears in time for the September board meetings of the IMF and the African Development Bank.
Economic analysts said Zimbabwe's foreign and domestic debt, currently hovering over $10 billion, has undermined the country's creditworthiness and compromised its ability to secure new funding due to the fact that most of it is now in arrears.
Finance minister Patrick Chinamasa, who is also in London to drum-up foreign direct investment support for Zimbabwe's dying economy, said the whole point of the rapprochement, after 16 years of being shut out of international lending, was to receive new funds.
"For us to turn round the fortunes of our country we need new money," he said, adding that manufacturing "was on its back" and government finances severely strained.
Zimbabwe degenerated into economic chaos after Mugabe implemented a controversial land reform programme around 2000, which led to the seizure of white-owned commercial farms.
The land grabs, human rights abuses and violent, disputed elections saw western nations cut off aid to Zimbabwe and impose sanctions on the nonagenarian leader and other members of his ruling Zanu-PF party.
But now western diplomats are seeking to avert a deepening economic crisis, amid concerns about what could happen when Mugabe dies or leaves office.
Zimbabwe's economy is slowing down due to lack of foreign investment, electricity shortages and expensive loans. Cheaper imports are damaging local industry, forcing firms to close.
This has seen the government failing to meet its monthly obligations, a situation that has fuelled a series of rare protests, as well as a strike by teachers, doctors and nurses over unpaid salaries.
Chinamasa said Washington had become more sympathetic to the idea of a rapprochement with Zimbabwe, although an American official said the US remained opposed to a deal with the IMF.
Zimbabwe has been in arrears to the IMF, to the tune of $111 million, since 2001, and owes the World Bank more than $1 billion.
Source - dailynews
