Zimbabwe set to clear external debts in September

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Zimbabwe set to clear external debts in september

Mr Khupikile Mlambo, Deputy Governor of the Reserve Bank of Zimbabwe says the country is expected to make up for all its debt arrears to major international lenders by September.

Mlambo disclosed this to reporters at the sideline of the Londo Investment summit.

He said that the country could return to international capital markets after the payment

“The ball is in our court, it is not with the IMF or the World Bank or the African Development Bank,” he said.

Zimbabwe had been shut out of international capital markets since it began defaulting on its external debt in 1999.

In 2016, Zimbabwe paid off 15 years’ worth of arrears to the International Monetary Fund (IMF). It is still years behind on payments to the World Bank and African Development Bank, however, hampering its ability to tap development financing from the two.

Zimbabwe was working on the Lima plan – a payment plan agreed with foreign lenders in 2015 in the Peruvian capital.

“We are on course for September for sure to repay’’

Having already started to implement fiscal reforms, the government must also tackle high employment costs and low productivity in the public sector, Mlambo said.

Zimbabwe has $1.75 billion in foreign arrears. The IMF has suggested Harare cut public sector wages and farm subsidies as well as improving transparency in the mining sector and reaching an agreement on compensating farmers.

Once its multilateral arrears are cleared, the bilateral debt would be next on the agenda, said Mlambo, which could happen by the end of the year.

“It is optimistic, but if we could do everything by December I would be very happy,” he said. “At least if we can clear all the multilateral debt, then we can begin to make approaches towards international capital markets.”

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