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Zimbabwe to hold talks on $21 billion debt albatross this month
07 Nov 2024 at 07:19hrs | Views
Zimbabwe will resume talks with creditors later this month to restructure $21 billion in external debt as it seeks to exit a default that's kept it locked out of international capital markets since 1999.
"We have been busy, doing work around getting rid of our albatross in terms of the external arrears," Finance Minister Mthuli Ncube told lawmakers Wednesday at a pre-budget seminar in Bulawayo, the nation's second largest city. On November 25 "we will have another high-level dialogue" with creditors to move that agenda forward," he said.
The talks will also include the African Development Bank President Akinwumi Adesina and former Mozambican President Joaquim Chissano, Ncube said.
Their help was enlisted by Zimbabwe's President Emmerson Mnangagwa in 2022 to lead the talks with creditors including the World Bank, Paris Club, European Investment Bank and the AfDB.
Last month the nation hired advisers to assist with the restructure.
The arrears have also meant that the nation hasn't been able to secure financing from multilateral lenders such as the International Monetary Fund, forcing it to resort to the central bank to fund its borrowings.
The isolation has fanned inflation and undermined the nation's efforts to create a stable local currency to replace the US dollar in local transactions, including its most recent attempt when it launched the ZiG, short for Zimbabwe Gold, in April.
The central bank's Deputy Governor Innocent Matshe, at the same event, urged Ncube to double down on measures to promote the wider use of the ZiG when he presents a budget later this month.
For its part, the central bank will maintain tight monetary policy into the new year to control excess liquidity to support the currency and prevent an inflation surge, Matshe said.
The Reserve Bank of Zimbabwe expects monthly inflation that surged to 37.2% in October from 5.8% in September "to correct," the deputy governor said. It sees it slowing "to below 5% by end of this year and below 1% for the rest of 2025," he said.
"We have been busy, doing work around getting rid of our albatross in terms of the external arrears," Finance Minister Mthuli Ncube told lawmakers Wednesday at a pre-budget seminar in Bulawayo, the nation's second largest city. On November 25 "we will have another high-level dialogue" with creditors to move that agenda forward," he said.
The talks will also include the African Development Bank President Akinwumi Adesina and former Mozambican President Joaquim Chissano, Ncube said.
Their help was enlisted by Zimbabwe's President Emmerson Mnangagwa in 2022 to lead the talks with creditors including the World Bank, Paris Club, European Investment Bank and the AfDB.
Last month the nation hired advisers to assist with the restructure.
The arrears have also meant that the nation hasn't been able to secure financing from multilateral lenders such as the International Monetary Fund, forcing it to resort to the central bank to fund its borrowings.
The isolation has fanned inflation and undermined the nation's efforts to create a stable local currency to replace the US dollar in local transactions, including its most recent attempt when it launched the ZiG, short for Zimbabwe Gold, in April.
The central bank's Deputy Governor Innocent Matshe, at the same event, urged Ncube to double down on measures to promote the wider use of the ZiG when he presents a budget later this month.
For its part, the central bank will maintain tight monetary policy into the new year to control excess liquidity to support the currency and prevent an inflation surge, Matshe said.
The Reserve Bank of Zimbabwe expects monthly inflation that surged to 37.2% in October from 5.8% in September "to correct," the deputy governor said. It sees it slowing "to below 5% by end of this year and below 1% for the rest of 2025," he said.
Source - Bloomberg
