Wednesday, July 06, 2016

‘We’ve the Right to Travel Our Own Path’
July 6, 2016
Lloyd Gumbo Senior Reporter
Zimbabwe Herald

Zimbabwe is a shareholder to regional and international financial institutions and as such will not be embarrassed to request funding from the organisations, Finance and Economic Development Minister Patrick Chinamasa has said.

Minister Chinamasa who is in Britain, made the remarks during a BBC HARDtalk programme hosted by Zeinab Badawi, who asked him whether it was not ironic that the Zimbabwe Government wanted finance facilities from the International Monetary Fund and the World Bank, the majority of whose members are blamed for the country’s economic meltdown.

He is in Britain to meet the Minister for Africa in the Foreign and Commonwealth Office, Mr James Duddridge and Mr Mark Lowcock, permanent secretary in the Department for International Development.

“Please get this clear, we are a shareholder in the World Bank, we are a shareholder in the African Development Bank and we are a shareholder in the IMF,” said Minister Chinamasa.

“Even with the African Development Bank, we are the largest shareholder in Southern Africa. So, all we are doing in the engagement is to try to enjoy the benefits of our membership, access to credit.

“Their rules provide as it turns out, that we cannot enjoy those benefits until we clear our arrears. So the engagement is about clearing our arrears so that we enjoy the benefits of our membership. And we are not embarrassed by that.”

Zimbabwe owes the AfDB about $600 million, the IMF $120 million and the World Bank over $1 billion. These creditors accepted the country’s debt clearance strategy in Lima, Peru last year.

Minister Chinamasa said Zimbabwe was in a unique situation because it used the US dollar for transactions, with the biggest challenge being that the country could not print the currency.

He said it was inevitable that using the US dollar for domestic financing was unsustainable.

To that end, he defended the planned introduction of the $200 million-backed bond notes that are meant to incentivise exporters whose products will see the country earn foreign currency.

Badawi claimed there was economic uncertainty in Zimbabwe as a result of political uncertainty given that President Mugabe was 92 years old yet there was no clear succession plan.

But Minister Chinamasa shot back: “Each country has a right to travel its own path in history and in the case of our President, yes he is 92, but you must also know the long path he has travelled almost since 1958 so he has definite views about the destiny of Zimbabwe.

“He remains in place to ensure that the trajectory he wants to set for Zimbabwe will be there even after he is gone. To be fair to us, Zanu-PF remains a very solid, cohesive, formidable political force in Zimbabwe and all the instability that you are talking about is not within our party.

“I’m saying as far as Zimbabweans are concerned, we are happy and as far as Zanu-PF is concerned, we are happy. Essentially, the President wants to leave this country on a trajectory, in terms of values and destiny which will not be reversible.

“And as far as Zanu-PF is concerned, we are saying anyone who wants to contest, must feel free and if the population agrees with them, of course it means the results will be otherwise. But we should not be dictated to when we choose our leader,” said Minister Chinamasa.

Badawi claimed the education and health sectors were in a mess because the Government had failed.

But Minister Chinamasa said Government deserved credit for its socialist policies that sought to improve the lives of every Zimbabwean.

He said there were a lot of success stories that Zimbabwe scored contrary to the western media’s obsession with negativity.

“Since independence, we have spent millions of dollars into expansion of education, expansion of the health sector and I think we should be given credit for that.

“Something that was not there before independence. People would go hungry before independence, they would not be fed. But only President Mugabe’s Government is able to undertake feeding of the entire population, something that could not be done in the history of colonialism.

“There are good success stories. The fact that after this pounding, we have remained resilient and able to have any health system still worth talking about is good credit for us. It’s just that you are not appreciating and accepting it,” he said.

Zimbabwe in historic London conference

July 6, 2016
Business Correspondent

Government has reiterated its commitment to clearing it arrears with multilateral creditors while at the same time pledging to compensate former white farmers for land developments as part of its re-engagement process. This came out at Zimbabwe’s first high level investment conference in the British capital, London in nearly two decades yesterday. The conference was organised by Africa Confidential and ran under the theme: “Zimbabwe 2016, Rebuilding and Rebooting.”Finance and Economic Development Minister Patrick Chinamasa who led the Zimbabwe delegation told the conference that Government remains committed to pay former white farmers for land and improvements. He said Government would set up a fund to compensate for land, developments and equipment. This comes as Ministry of Lands recently said it had valued nearly 2000 farms out of 6 240.

Minister Chinamasa also said treasury was now getting real-time reports on diamond production from the amalgamate diamond group which excludes Anjin, Jinan and Mbada. This he said would enhance transparency and accountability in the diamond sector which is said to have lost billions of dollars through trade mis-pricing and smuggling.

On the plan to clear arrears, Minister Chinamasa said Zimbabwe hopes to get its proposal to clear debt arrears with multilateral lenders signed off by December, enabling it to start talks with bilateral sovereign lenders.

“We are looking forward to the three multilateral lenders to formally adopt our debt clearance strategy when they meet in December,” said Minister Chinamasa, adding he expected this to be a “done deal”. But if we clear the arrears without a corresponding commitment of new money, we will be in a worse position . . . there is need for reciprocal commitment to provide us (with) new money, and that are the negotiations that we are undertaking.”

The Reserve Bank of Zimbabwe governor Dr John Mangudya told the same conference that Zimbabwe’s problems would be resolved if it clears its arrears and successfully completes its re-engagement programme.

“The issue with Zimbabwe is very simple, we need to complete re-engagement process to make the country a better investment destination. The first plan is the clearing of arrears ($1,8 billion) to the African Development Bank, the International Monetary Fund and the World Bank. Those arrears have not been paid since 2000 and since then the country has suffered a trauma of isolation and we want to remove that trauma through engagement,” Dr Mangudya said.

He noted that even the British had agreed that Zimbabwe should be supported. That was a good sign. That’s why we are here for this conference and to meet official representatives.”

Zimbabwe owes around $110 million to the International Monetary Fund, which it hopes to clear against a special drawing rights (SDRs) allocation of around $130 million. A bridging loan from the African Export-Import Bank would help clear arrears of $600 million to the African Development Bank, while Harare was also talking to the World Bank where it owes $900 million.

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