Maravi

(TALKZIMBABWE) Some donors willing to cancel debt: Biti

Some donors willing to cancel debt: Biti
AFP/TZG
Thu, 25 Feb 2010 15:36:00 +0000

SOME donors would be willing to cancel Zimbabwe's 5.4 billion dollar foreign debt, if the inclusive Government presents a united proposal to settle it, finance minister Tendai Biti said Thursday.

"I am in constant touch with the donors and I have no doubt that they will put up money," Biti told journalists in Harare after meeting officials from the African Development Bank.

"They will help us, once there is a green light from government" on how Zimbabwe wants to settle its debt, Biti added.

Zimbabwe's 5.4 billion dollar (four billion euro) foreign debt is roughly the size of its gross domestic product last year, and is hampering efforts to rebound from a decade-long sanctions-induced economic crisis that saw inflation soar to multiples of billions in 2008.

The inclusive Government of President Robert Mugabe and Prime Minister Morgan Tsvangirai has over the past year been divided on how to tackle the debt.

Some in government have proposed mortgaging the country's vast mineral deposits, while others want the country to be declared an Highly Indebted Poor Country (HIPC), criticised as a carbon copy of the disastrous Economic Structural Adjustment Programme of the late eighties.

Zimbabwe posted economic growth of 4.9 percent last year, the first growth in over a decade.

Hassan Khedr, dean of the African Development Bank, said Zimbabwe's government remained divided on what route to take.

"We understand that there is still divided opinion related to whether to be classified as HIPC country in order to be eligible for this kind of support for debt cancellation," he said.

"There are still a lot of impediments, strains that still need to be looked at. That is do-able only if the country is willing to have an arrears clearance programme."

Zimbabwe owes a combined 1.3 billion dollars to the IMF, the World Bank and the African Development Bank.

Last week, the IMF restored Zimbabwe's voting rights, stripped seven years ago, although the southern African country will not be able to access much needed financial aid until it settles its arrears.

Labels: HIPC, TENDAI BITI

posted by MrK @ 5:18 PM