Zimbabwe will fast-track plans to settle its debt arrears, a key step needed to restore investor confidence in the country’s economy, Finance Minister Mthuli Ncube said.
The government needs funds to rebuild an economy battered by almost two decades of misrule under former President Robert Mugabe that’s left infrastructure crumbling and crippling cash shortages. Emmerson Mnangagwa, who won a disputed presidential election last month, has said his government plans to prioritize the repayment of about $1.8 billion of arrears to lenders to enable the Treasury to borrow again.
“There is a plan that we have put in place that I’m going to be accelerating to make sure that this debt issue is dealt with,” Ncube said. “It’s one building block towards creating confidence in terms of investors.”
The government owes money to multilateral lenders including the African Development Bank and the World Bank, which the government is engaging to ensure they’re “fully on board, working with us to resolve the arrears,” Ncube said. The state also owes debt to the Paris Club of creditors, which the government will also hold discussions with, he said.
Mnangagwa appointed Ncube, 55, as his finance minister last week, replacing Patrick Chinamasa, who served in the post since 2009. The president has pledged to revive mining, agriculture and manufacturing, ensure macro-economic and fiscal discipline, and bring debt under control.
Ncube favours a return of the Zimbabwe dollar as the official currency, though several steps are needed first, details of which the central bank will convey at the end of this month, he said. Zimbabwe has relied mainly on the US dollar since scrapping its own currency in 2009 to halt hyperinflation that saw prices double every day. The government’s introduction of bond notes, a dollar-backed quasi-currency, to ease the liquidity crisis has helped little.
“There’s a need to build confidence, there’s a need to build foreign reserves,” Ncube said. “Issues such as foreign-currency accounts for example are thing that we’ll look into quite urgently. The monetary policy statement from the governor at the end of the month will give further information on that.”