The African Development Bank (ADB) is looking to support Zimbabwe with much-needed credit lines, and a process is already underway, starting with assisting the country tackle its arrears.
Despite a more buoyant mood since Emmerson Mnangagwa ascended to the presidency in November, Zimbabwe is faced with a crippling shortage of hard currency that is making it hard for businesses to operate.
ADB president Akinwumi Adesina told Business Day this week that Zimbabwe, which he termed “an important member of the bank”, owes it $645m while its debt to the World Bank stands at $2bn.
Earlier this year, Business Monitor International (BMI), a member of the Fitch group, said it is unlikely that the Zimbabwe government will be able to clear all of its $2bn arrears to the International Monetary Fund (IMF) and the ADB without substantial debt forgiveness.
But Adesina said the country has cleared its arrears with the IMF using its special drawing rights facility — a reserve asset meant to supplement each member country’s official money reserves.
Discussions with other lenders were ongoing, according to Adesina, but he would not commit to a time frame. “These conversations are continuing; I’m hopeful that we will be able to reach a solution with all the parties concerned.”
In December, the Cairo-based African Export-Import Bank (Afreximbank) said it would avail a loan to the tune of $1.5bn to Zimbabwe to assist with the economic recovery process.
Adesina said the ADB would provide funding for the long-mooted upgrade of the Beitbridge border post, among the busiest and most congested, crossings on the continent. “Its a critical part of regional infrastructure and we will be delighted to finance it.”