Finance Minister, Mthuli Ncube said Zimbabwe plans to clear its $2 billion arrears with the World Bank and African Development Bank (AfDB) in the next 12 months. The decision was made after securing the support of international creditors and donor countries.
The country has struggled to access credit from international lenders since defaulting on its debts to global lenders two decades ago, and running up arrears of nearly $6 billion. Ncube noted that Zimbabwe’s arrears clearance program had been backed by the United States government, which maintains sanctions against Zimbabwe.
Ncube, who met international lenders as well as representatives of the U.S. and British governments in Bali, Indonesia, on the sidelines of the annual International Monetary Fund and World Bank meetings, said “my intention is that by this time next year we would have paid off the AfDB and World Bank. All options are on the table, including the Highly Indebted Poor Country (HIPC) option debt write-off, or the HIPC-lite or the ad-hoc solutions, with sponsors”.
He also added that “for sponsors, we will be talking to the G7 members to see if one or two of them, or all of them, could sponsor us and give us some lines of credit, bridging finance to be able to clear those arrears.”
The International Monetary Fund and World Bank launched the HIPC initiative in 1996 to help poor countries struggling with external debt get debt relief.
Ncube revealed that from early 2019, Zimbabwe would embark on a program that allows the International Monetary Fund to monitor its economic reforms. The program goes not entail funding from the global lender.