Mthuli Ncube says Zimbabwe set to start clearing I...

Mthuli Ncube says Zimbabwe set to start clearing IFI debt

Zimbabwe is engaging with the World Bank and International Monetary Fund on how to clear its debts with international financial institutions, finance minister Professor Mthuli Ncube said at an IMF press conference on Saturday.

"We've begun to make token payments to the World Bank, the AfDB (African Development Bank), European Investment Bank. And all the Paris Club creditors, 17 of them, we will be making token payments to show that we want to be a good debtor,” said Professor Ncube.

Prof Ncube said that the country was putting together debt payment and restructuring plans.

These hinge on an IMF staff visit to Zimbabwe in December and which will lead to a discussion on a staff-monitored programme in the first and second quarter of 2023.

Prof Ncube said that would enable access to "resources from a sponsor who will help us with bridge funding in order to clear the arrears" to international lenders and after that to restructure its debt to bilateral Paris Club creditors.

He said the country is now issuing bonds with maturities of between two and 20 years in order to honour its debt to creditors. He also said the country is looking at how they can be traded, while exploring how to issue bonds to compensate white former farmers over time.

Ncube said that the country would consider cutting the current high interest rates after three to four months of monthly inflation at 3%, though he would prefer 1%.

The RBZ maintained is main interest rate at 200% in September after sharply raising it from 80% in June.

The central bank’s monetary policy measures to curb hyperinflation and protect value of the local currency have been largely successful with stabilisation of prices having been maintained for several weeks after a period of runaway hyperinflation.