Mnangagwa Hails AfDB Over Support For Zimbabwe’s Debt Clearance

(AFRICAN EXAMINER) – Zimbabwean President Emmerson Mnangagwa has applauded the African Development Bank (AfDB) for its support and commitment towards resolving country’s debt arrears.

The Southern African nation owes $13.5 billion to multilateral financial institutions, bilateral partners, and other creditors

President Mnangagwa gave the commendation issues during a meeting with the President of AfDB, Dr. Akinwumi Adesina in Harare. The Zimbabwean government received reassurance of support for a strong push to help it clear its debt arrears at the meeting and the government and other partners agreed to work together to develop an action plan that will resolve the country’s debt arrears.

Ambassadors and representatives of several G7 countries, the World Bank and International Monetary Fund (IMF) met with Dr. Adesina in Harare. They pledged to work with the Bank to develop a debt clearance and resolution roadmap, as well as a re-engagement agenda.

The debt clearance process to be led by the Bank chief will emphasize the importance of implementing prior land compensation commitments and additional political and economic reforms.

Mnangagwa also expressed his gratitude to Dr. Adesina for accepting to be the champion for the arrears clearance and debt resolution process.

He also commended the Bank for standing by Zimbabwe through difficult circumstances and expressed a strong to work with the Bank and other partners to resolve the country’s debt issues.

“During the Covid-19 pandemic, Zimbabwe received no external help except from the African Development Bank. The African Development Bank was quick to respond to Zimbabwe’s needs. We had to re-prioritize our budget and, ultimately, we managed the situation against all odds”, he said.

The AfDB supported Zimbabwe with $13.8 million under the Bank’s Covid Response Facility. The Bank has focused on strengthening the country’s public finance management capacity through a Transition Support Facility. It will also provide Zimbabwe with $4.2 million in technical support for the implementation of its arrears clearance and debt resolution strategy.

While address the media at State House in Harare, the AfDB helmsman explained that he accepted the role of Zimbabwe’s debt resolution champion because it was his responsibility as the president of Africa’s premier financial institution and it’s the right thing to do.

“It is about the people of Zimbabwe. They have suffered long enough – for two decades now. When you look at the situation today, 40 percent of the country’s population live in extreme poverty. We must change that and create new hope. I believe that it is time to reinvigorate, and re-dynamize the country’s economy because it is critical for the Southern African community”, he added.

Despite economic challenges, Zimbabwe remains a strong and reliable shareholder of the African Development Bank. It has continued to make quarterly token payments of $500, 000 to service debts to the AfDB Group, the World Bank, and other creditors.

He also noted that Zimbabwe is one of the 54 African member countries of the AfDB. “When one part hurts, the whole body hurts”, he stressed.

He said Bank is also keen to see Zimbabwe play an important role within the Africa Continental Free Trade Area through manufacturing, agriculture, human capital, ICT, and other sectors

“It is going to take more than one person. It is going to take all of us, locked hand in hand, working together to chart this course”, he further explained.

The Bank chief also met with Zimbabwe’s private sector operators to discuss their role in the anticipated arrears clearance action plan. The meeting explored opportunities for leveraging private sector financing.

Dr. Adesina also observed that Zimbabwe’s debt arrears clearance and resolution will create a new growth trajectory for the country, making it a more vibrant economy.

“It is going to be challenging, but it is not impossible. Failure is not an option. The arrears clearance strategy must succeed.

“We did it for Somalia, helping to clear the country’s arrears, working closely with the World Bank and the IMF. We also did it for Sudan working with partners. Circumstances are different obviously, but President Mnangagwa has made a clear commitment to engaging with the international community. A new reinvigorated Zimbabwe is good for everybody”, he added.

Zimbabwe’s Minister for Finance and Economic Development, Professor Mthuli Ncube said the current level of state debt is a significant barrier to Zimbabwe’s goal of becoming a middle-income nation by 2030.

“We are grateful that President Adesina has agreed to act as the champion of our debt arrears clearance agenda. If we don’t clear our arrears, it will hamper our development agenda”, he added.

Zimbabwe joined the AfDB Group on 23 June 1980. The Bank has so far invested $930.5 million, financing 64 projects. It continues to support Zimbabwe with resources from its Transition Support Facility.

Since 2012, the Bank has helped the country improve public finance management systems. This includes oversight bodies like the Office of the Accountant General and the Parliament. The AfDB also offers specialized technical assistance on debt management and support for the restoration of state-owned enterprises.