Zimbabwe considers debt cancellation

Zimbabwe considers debt cancellation
Published: 17 October 2018 (3652 Views)
Zimbabwe is considering a request to have its debt with the multilateral lenders, World Bank and International Monetary Fund to be cancelled in order to reduce burden on the country's fragile economy.

Debt either at household and national level is a huge burden which incapacitates financial freedom and economic growth and development.

Zimbabwe total debt, both domestic and external, stands at over US$16 billion and the government's priority is to deal with this debt as a matter of urgency.

During his meetings in Bali, Indonesia with the IMF and World Bank, the Minister of Finance and Economic Development Professor Mthuli Ncube proffered debt forgiveness for Zimbabwe by these institutions as a way of dealing with debt which continues to choke Zimbabwe's economic growth prospects.

Economist Mr Persistence Gwanyanya says Zimbabwe qualifies for debt cancellation as it is a highly indebted poor country, using the Paris Club criteria.

"Before the rebasing of the country's economy by the Zimbabwe national  statistical agency (Zimstat) to at least US$25 billion, Zimbabwe had one of the highest debt to GDP ratio at over 100 percent. This qualifies Zimbabwe to be a highly indebted poor country using the criteria of the Paris Club institutions, that is, the World Bank and the IMF," said Mr Gwanyanya.

Mr Gwanyanya also said being tagged a highly indebted poor country (HIPC) comes with repercussions for the country.

"The problem with debt forgiveness is that you lose your financial and economic independence because everything gets dictated to you by those who forgive you the debt," Mr Gwanyanya said.

The other challenge with debt forgiveness is that you become less attractive for foreign direct investment (FDI) and you become less creditworthy as a country.

Mozambique had its debt cancelled in the early 2000s but that did not solve its economic problems and now it finds itself with a high amount of unserviceable debt.

The authorities therefore need to carefully apply their minds before they go the HIPC route.

- zbc

Tags: GDP, IMF, WorldBank,
 0

You May Like These Videos

Comments

There are no comments.

Latest stories

MDC appeals to Jacob Mudenda over arrested MPs

by Tabitha Khumalo | 21 January 2019 | 33 Views

Zimbabwean President surrounded by vultures masquerading as patriots

by Dr Masimba Mavaza | 21 January 2019 | 36 Views

140 buses deployed in Harare

by Mandla Ndlovu | 21 January 2019 | 89 Views

Mnangagwa's current location revealed

by Mandla Ndlovu | 21 January 2019 | 144 Views

Enter the dragon: The rise of China

by Victor Bhoroma | 21 January 2019 | 54 Views

Can currency reforms save the Zimbabwean economy?

by Victor Bhoroma | 21 January 2019 | 61 Views

Kombi operators have themselves to blame

by Tafara Shumba | 21 January 2019 | 80 Views

BREAKING: Court rules that blocking internet is illegal

by Mandla Ndlovu | 21 January 2019 | 91 Views

Energy Mutodi speaks on Mnangagwa 'ritual photo'

by Mandla Ndlovu | 21 January 2019 | 84 Views

Use of children in protests condemned

by CLS and FF | 21 January 2019 | 39 Views

Oppah Muchinguri to become Vice President?

by Mandla Ndlovu | 21 January 2019 | 123 Views

Twelve MDC MPs arrested as army continues crackdown

by Mandla Ndlovu | 21 January 2019 | 243 Views

Ramaphosa could use Davos to apply pressure on Mnangagwa

by Staff reporter | 21 January 2019 | 259 Views

Road accident claims five near Chinhoyi

by Staff Reporter | 21 January 2019 | 158 Views

Is it back to normal in Harare?

by BBC | 21 January 2019 | 197 Views

Mnanagwa speaks on DRC ConCourt decision

by Staff reporter | 21 January 2019 | 136 Views

Accident kills five

by Staff reporter | 21 January 2019 | 84 Views

PHOTO: Mthuli Ncube dumps Mnangagwa's scarf?

by Mandla Ndlovu | 21 January 2019 | 190 Views

'Mnangagwa govt riots explanation laughable'

by Staff reporter | 21 January 2019 | 113 Views

Zimbabwe faces bleak future, claims IMF

by Staff reporter | 21 January 2019 | 87 Views

'Zimbabwe electricity imports to continue until 2027'

by Staff reporter | 21 January 2019 | 75 Views

ZRP auctions 200 bales of clothes

by Staff reporter | 21 January 2019 | 70 Views

Chamisa prays for violence victims

by Staff reporter | 21 January 2019 | 74 Views

Chamisa's MPs flee govt terror

by Staff reporter | 21 January 2019 | 80 Views

'Evil little bishop' saddened by the current repression in Zimbabwe

by Staff reporter | 21 January 2019 | 92 Views

Church calls for GNU

by Staff reporter | 21 January 2019 | 73 Views

ZANU PF bribes MDC officials to oust Chamisa

by Mandla Ndlovu | 21 January 2019 | 189 Views

Private media now working against the government of Zimbabwe

by Chrispen Chebundo | 21 January 2019 | 125 Views

When selfish goals stand in the way of national interests

by Mapozho Saruchera | 21 January 2019 | 87 Views

The horror behind Zimbabwe's internet shutdown

by NoViolet Bulawayo | 21 January 2019 | 158 Views

Malema should mind his own business

by Nobleman Runyanga | 21 January 2019 | 158 Views

'I almost killed a man in church' Prophet Chiza confesses

by Mandla Ndlovu | 21 January 2019 | 124 Views

WATCH: Business as usual in Bulawayo

by Staff Reporter | 21 January 2019 | 109 Views

PHOTO: Mnangagwa in bizzare ritual?

by Mandla Ndlovu | 21 January 2019 | 227 Views

I'm looking for the Mkwananzi family from Mgungubani

by Obina Sibanda | 21 January 2019 | 89 Views