TellZim Reporter
A debt analyst with the Zimbabwe Coalition on Debt and Development (ZIMCODD) has commended the move by the government of Zimbabwe to continue pushing for the arrears clearance and data processing initiatives which he believes are vital for economic development.
John Maketo said the different initiatives underway where government has went on an ambitious drive to re-engage its creditors as a way of coming up with a solution to the challenge is vital to turning around the country’s economic fortunes.
“The agenda is quite clear and is to set off the current debt clearance. Since 2000, Zimbabwe has defaulted in its debt repayment and over the years, the country has accumulated arrears and penalties to the tune of US$ 6 billion.
“The more we prolong settling the debt, the more penalties we accumulate. The debt needs to be settled once and for all so that Zimbabwe is able to access new lines of credit. It may be possible to ignore these arrears like Zimbabwe did in the past but the painful thing is that we don’t have access to concessionary or cheaper loans. Of course we can borrow from somewhere but those lenders do not offer us concessionary loans as they give us loans with high interest rates coupled with stiffer terms of repayments. So this debt clearance is a matter of economic importance,” said Maketo.
He also praised government for its commitment to settling the outstanding debts for the first time since independence.
“For the first time since independence, Zimbabwe has never given subject of public debt such high prominence. Over the years, public debt has been treated as a minor issue but it’s glad that government and other stakeholders have come to the realization that public debt can be an elephant in the room with regards to economic development.
“This debt clearance is a very significant process which helps the country to reconnect with its creditors to establish a good gesture towards debt clearance which will help open up new lines of credit. If you do not clear debts, you remain ‘a debt risk’,” he added.
Maketo also said the composition of the dialogue delegation including former Mozambican President Joaquim Chissano and Africa Development Bank president Dr Akinwumi Adesina shows seriousness on part of Zimbabwe government towards the dialogue whose first chapter began in December 2022.
“The appointment of Chissano is critical in that we are not only talking of a former president of a neighboring country with liberation connections to Zimbabwe, but also an elderly statesman who has a reputable political profile. He can be of significance for Zimbabwe reaching out to its debtors and also a good political gesture that the country is ready to engage in political issues.
“The debt issue is more than an economic technicality as politics is involved in this debt question because it goes beyond repayment as it looks at land compensation to white farmers and governance issues.
“Appointment of AFDB president is also important in that Zimbabwe owes the AFDB, so seeing one of the debtors owed championing the repayment process is a good gesture for the country. More importantly, he is not only an economist or African who understands contexts or dynamics but is also a reformer with intense influence in the world of creditors. He is strategically positioned to champion the debt resolution,” he added.
He also said though the initiative to resettle debt is noble, the Second Republic should have done it earlier with sincerity and transparency in as far as debt sustainability is concerned.
