The Zimbabwean government has enlisted African Development Bank (AfDB) President Akinwumi Adesina to help the southern African nation clear its long-standing, huge external debt arrears amounting to 13.5 billion U.S. dollars.
Adesina arrived in Zimbabwe on Monday to kick start his engagement process with Zimbabwe’s President Emmerson Mnangagwa and other senior government officials including Finance Minister Mthuli Ncube.
Apart from meeting Mnangagwa and Ncube on Tuesday, the top AfDB official also met several African and G7 ambassadors and representatives of international financial institutions accredited to Zimbabwe.
Adesina accepted a request in February by the Zimbabwean government to serve as the country’s arrears clearance and debt resolution champion among international financial institutions and bilateral creditors.
According to the AfDB, discussions between Adesina and Zimbabwean officials were expected to centre on potential areas of technical assistance that the AfDB will provide to the Zimbabwean government.
Speaking at a joint press conference after meeting Mnangagwa, Adesina said he gladly accepted the role because of his firm belief in Zimbabwe’s economic potential.
“I came here to listen, to understand and appreciate what needs to be done to get where we need to. I will not work alone but will work closely with President Mnangagwa, Finance Minister Ncube, development partners, multilateral partners and the international community. I am very optimistic that working together we will be able to get there,” Adesina said.
Zimbabwe has tried unsuccessfully in the past to clear its huge external debt arrears through various strategies, with the last debt arrears clearance plan, dubbed the Lima plan agreed with global lenders in Peru in 2015, going off the rails.
The Zimbabwean government has since drawn up a new arrears clearance strategy that it hopes will succeed with the help of the AfDB President.
In 2015 and under the Lima plan, Zimbabwe cleared its 15-year debt arrears to the International Monetary Fund amounting to 108 million U.S. dollars, but this has not moved the IMF to release new loans to Zimbabwe, arguing it has to clear arrears with other international financial institutions and bilateral creditors and also implements a strong reform agenda.
Zimbabwe also owes the World Bank, AfDB, European Investment Bank, Paris Club and other bilateral donors billions of U.S. dollars.
Speaking at the same press conference, Zimbabwean Finance Minister Mthuli Ncube said Zimbabwe needed to clear its debt arrears in order to achieve its goal of becoming an upper-middle-income economy by 2030.
“What we have done so far is to begin token payments to the AfDB, the World Bank, EIB and all 17 Paris Club members. But what needs to be done is to implement the full roadmap for arrears clearance and for this to work well we need a champion and I am pleased to say that (Dr) Adesina has agreed to be the champion to cajole all partners around the world for us to be able to implement our arrears clearance strategy,” Ncube said.
Adesina said Zimbabwe deserved to be supported to clear its debt arrears because it had suffered economic hardships for a very long time and had continued to be a reliable and committed shareholder of the AfDB and also making token payments towards servicing its external debt.
“It’s time to reintegrate and re-dynamize Zimbabwe not only into the international financial institutions but also to open space for it to play its critical role within the South African Development Community (SADC) region,” Adesina said.
Adesina was optimistic that Zimbabwe’s arrears clearance and debt resolution strategy will succeed despite Western sanctions on the country.