eBusiness Weekly
Law blocking funding for Zim
Africa Moyo
Finance and Economic Development Minister Professor Mthuli Ncube will soon be headed for the United States of America to engage Washington on the Zimbabwe Democracy and Economic Recovery Amendment Act (Zidera) of 2018, the piece of legislation that appears to be the major hurdle blocking Harare’s efforts to unlock international funding.
In as much as Government is leaving no stone unturned in implementing far reaching reforms to turn around the economy, it emerged the US law is holding back all the efforts as it directs American officials in key international financial institutions to block the extension of funding to Harare.
As such, interactions between Harare and Washington are understood to be already underway and Minister Ncube is set to travel to the US in January next year, to deepen the engagements with top US officials over the ramifications of Zidera.
Zim/U S talks
Minister Ncube told Business Weekly yesterday on the sidelines of a Youth Interface Forum in Harare that the aspirations contained in Zidera were not bad, given that work had begun to address them.
“The relationship between Zimbabwe and the United States is a very good one. And my view is that we actually need to embrace Zidera because what is contained in Zidera in terms of reforms that ought to be done, we as Zimbabweans are already working on these reforms because they are actually good for us and we don’t have to be told by anyone,” said Minister Ncube.
“So there is a convergence of minds on Zidera. But of course the issue is that Zidera has financial implications in terms of financial sanctions; that is really the issue but then, the US Treasury, the US government, is open to us as Zimbabweans to engage them and frankly we welcome that.
“I will actually be going to the US end of January next year to interact with the US government around Zidera to make sure that we can explain ourselves on our programmes, both economic and political, so that we can make progress.”
US President Donald Trump signed the Zidera Amendment of 2018 on August 8, extolling it as an “incentive” designed to assist Zimbabwe “restore the rule of law, reconstruct and rebuild Zimbabwe . . .”
Zidera has been slammed by industrialists who say it has a negative impact on their operations particularly when moving funds across the globe, and in terms of the country accessing lines of credit from multilateral
financial institutions such as the World Bank and the International Monetary Fund (IMF).
Apart from the US, Minister Ncube also said Zimbabwe’s relations with European Union member countries such as the United Kingdom and France have vastly improved.
He said the UK, France and other global powerhouses, “are very supportive of Zimbabwe”, especially after the engagements in Bali, Indonesia, last week during the annual and spring meetings of the IMF and the World Bank.
Minister Ncube said Zimbabwe expects to get financial assistance from various financiers but in the “context of arrears clearance (and) also in the context of supporting social needs”.
“These countries are already helping Zimbabwe. The other day the EU gave us half a million euros for technical assistance and capacity building . . .
“The African Development Bank is also helping us. The UK has pumped in $1 billion since 2009 and most people don’t know that. So they have been supporting us on the social front but then they will do the other bit, which is in the arrears clearance and again, work with us and we are hopeful that they will work with us on the arrears clearance by extending critical lines of credit as we restructure our debt,” said Minister Ncube.
Creditors were excited about the new national blueprint, the Transitional Stabilisation Programme (TSP) and the political reforms being implemented.
Minister Ncube said creditors “really understood that we mean business” following announcement of reforms including cutting down Government expenditure, dealing with monetary sector reforms, privatisation of parastatals, establishment of a one-stop investment centre and ensuring food security.
Debt plan implementation
Ncube said he is “grappling with all the external debt” owed to the AfDB, the World Bank, the Paris Club.
The AfDB and the World Bank have been made the “preferred creditors”.
“So we are working hard to make sure that those institutions are paid off before we move to the second stage, which is the negotiation with the Paris Club creditors — the UK, US and so forth, to make sure that we restructure that debt as well,” said Minister Ncube.
He said agreeing on debt repayment with the financial institutions would “make it easy” for the country to raise capital for key projects since the country would have obtained better “credit standing” across the globe.
Minister Ncube said now that top economic players “accepted and endorsed” the country’s economic and political reforms, principally the Transitional Stabilisation Programme (TSP), citizens should expect better economic fortunes.
“. . . I got that done (acceptance of reforms) in Bali last week. There was an overwhelming response of the reform programme,” he said.
Zimbabwe debt
obligations
Zimbabwe has an external debt of $7,4 billion and following the roadmap developed in Lima, Peru in 2015, Treasury is actively seeking to clear the $2,5 billion owed to the AfDB, the World Bank and the European Investment Bank.
It also wants to restructure the $2,8 billion owed to Paris Club creditors.
