ZIMBABWE – A team from the African Development Bank (AfDB) and the World Bank were in the country last week to fine-tune modalities on how Zimbabwe would clear its $1,8 billion arrears to the two institutions and the International Monetary Fund (IMF).
Last week’s visit was a follow up to the Lima meeting where Zimbabwe’s plan to clear its arrears was approved by the three lenders.
In October, Zimbabwe’s plans to clear the $1,8 billion arrears to the financial institutions were approved in the Peruvian capital, Lima.
The three institutions would make the decision after IMF’s annual Article IV consultation, central bank chief John Mangudya said last week.
“Right now, the AfDB and the World Bank are in town reviewing issues from the Lima meeting and looking at the possible strategies for arrears clearance. The committee that went to Lima are working on the package, Zimbabwe Economic Revival strategy. In the paper we are outlining the way forward after arrears clearance,” Mangudya said.
He said the debts’ clearance was set to transform the building blocks towards economic transformation. It is expected that the move would unlock cheap lines of credit needed to reboot the economy.
Local companies are in urgent need of long term capital for retooling. However, the facility is hard to come by locally due to the short-term nature of deposits.
Mangudya added that Zimbabwe has to align its laws with the Constitution to build the confidence.