'Repayment challenges stalling Zimbabwe - China deals'

President Robert Mugabe says while most of the mega projects signed with China are progressing well, delays in repayment of arrears have affected the implementation of some of the deals.

The President says he is satisfied with the implementation of the mega deals concluded with the Asian economic giant which are set to assist in the transformation of the local economy.

In his traditional birthday interview with the ZBCtv, President Mugabe said the recent meeting with the Chinese President Xi Jinping was meant to review the projects and push for the accelerated implementation.

President Mugabe, however, raised concern that delays in the repayment of arrears on some of the loans is threatening the implementation of some of the deals and highlighted the need for the country to create the necessary capacity to honour the obligations.

The delays in the repayment of the loans have in some cases seen the Sinosure, a leading Chinese insurance company, reluctant to guarantee additional financial loans from Chinese banks.

The Permanent Secretary in the Ministry of Finance and Economic Development Mr Willard Manungo said despite the limited fiscal space, treasury has prioritised repayment of loans not only to China, but the other bilateral and multilateral creditors.

As at 31 October 2016, Zimbabwe's public debt stood at US$11.2 billion or 79 percent of GDP.

Of the US$7.5 billion external debt, US$5.2 billion is in arrears.

In his budget presentation, Finance and Economic Development Minister Cde Patrick Chinamasa acknowledged that the huge external debt has resulted in deterioration of relations with major creditors, thereby inhibiting access to finance.