Maravi

(NEWZIMBABWE) Mutambara says Zim ‘over-borrowed’

COMMENT - Arthur Mutambara, conveniently forgetting ZDERA, Sec. 4 C (2), which forbids the scrapping of the Zimbabwe government's debt for the last 10 years. Zambia had $7 billion in debt, which was wiped away through HIPC, something the Zimbabwean government is prohibited from benefiting from, through ZDERA Sec4C (2). Of course, Zambia's $7bn debt was forgiven after the 'privatisation' of tens if not hundreds of billions of dollars worth of copper, cobalt and uranium deposits.

Mutambara says Zim ‘over-borrowed’
New approach ... Arthur Mutambara and Morgan Tsvangirai at book launch
02/07/2011 00:00:00
by Business Reporter

DEPUTY Prime Minister, Arthur Mutambara, says Zimbabwe is practically broke with the national debt now outstripping the country’s gross domestic product (GDP). "Zimbabwe's GDP is zero," Mutambara told delegates to a recent book launch in Harare. "If you owe some one US$7 billion and your GDP is US$7 billion then you do o not have any money.”

Zimbabwe’s national debt is said to be more than US$7 billion, outstripping the country’s GDP which is estimated at just over US$6 billion. "We are heavily borrowed and we do not have a GDP to talk about," Mutambara said.

Early last month, the International Monetary Fund (IMF) said Zimbabwe was in “debt distress” with a large and unsustainable external debt stock which represented 118 percent of GDP at the end of 2010. The bulk of the debt was also said to be in arrears.

Central Bank Chief, Gideon Gono also said the country’s national debt to GDP ratio was out of sink with international best practice.

“The country’s total external debt stock amounted to US$6 929 million as at 31 December 2010, representing 103 percent of GDP, a level which is above the international debt sustainability benchmark of 60 percent,” Gono said in a monetary policy review presented in January.

“The bulk of the country’s external debt is owed to multilateral creditors, which account for 36 percent of the country’s total debt.”

Gono said bilateral and commercial creditors were owed 33 percent and 31 percent, respectively with central government remaining the largest debtor at 57 percent while parastatals and the private sector owed 35 percent and 8 percent, respectively.

In a statement issued following consultations with local authorities in June, the IMF welcomed the government’s strategy for arrears clearance and re-engagement with the international community.

The government was however urged to refrain from further “non-concessional borrowing and to seek better terms for recently contracted debt”.

Labels: ARTHUR MUTAMBARA, DEBT, HIPC, NEOLIBERALISM

posted by MrK @ 2:54 PM