Professor Ncube says Zimbabwe's debt is unpayable

ZIMBABWE'S US$10 billion debt is unpayable at the moment and the only way to go is through the debt forgiveness route, Minister of Industry and Trade Professor Welshman Ncube has said.

Of the publicly guaranteed debt of US$6,4 billion, total external arrears comprised US$4,7 billion by October 31 2010.
Minister Ncube said this while addressing delegates at the DEAT Capital Private Sector Roundtable which was held in Harare last week under the theme "Financing and Strengthening Zimbabwe's Private Sector".
He added that considering that the country's 2011 National Budget is US$2,7 billion it would take the next five years paying the debt if the whole budget is dedicated to servicing the debt.
Minister Ncube added that it has been "extremely difficult" to establish consensus in Government over the country's debt.
"The only way out is to declare oneself as poor under the Highly Indebted and Poor Countries. However, there is an argument that while we admit that we are highly indebted but we are not a poor country given our vast natural resources.
"The challenge is that the same countries that we expect to forgive us are the same countries that imposed sanctions against Zimbabwe.
"So what guarantee do we have as a country that if we take on the HIPC status, the same countries will forgive our debt? No one can guarantee that and one needs to understand that the process of declaring oneself poor is by its nature very humiliating.
"After humiliating ourselves as a country through adopting the HIPC status, then our debt is not given. So what we have so far as a Government is a debt strategy," explained Professor Ncube.
He added that the debt strategy has been approved by Cabinet and there is already a committee in place chaired by Deputy Prime Minister Arthur Mutambara that is looking into that.
"We are agreeable that if we are to adopt the HIPC status, it must be leveraged on the lifting of sanctions. However, there is need for all parties in the inclusive Government to work together.
"Our debt strategy also includes leveraging on our natural resources on how to raise money and avoid the same debt trap in future. There is need for some conviction and some sincerity about the country's debt.
"Unfortunately, we cannot speak with the same frequency and force. That is why it is difficult for us as a country to continue sourcing loans from multilateral lending institutions for industry. "Even if Government guarantees the loans, who will believe you when you say you will pay back?"
Presenting the 2011 National Budget last week, Finance Minister Tendai Biti said that Government has already initiated a debt validation and reconciliation programme to ascertain the full extent of its indebtedness.