|
| |
|
| |
| Zimbabwe:
External arrears surge to US$690m 16th August, 2001. Harare - Zimbabwe's arrears on external debt repayment in July shot up to more than US$690 million as the country chokes under a burgeoning debt problem. Finance Minister Simba Makoni last week said arrears on Zimbabwe's foreign debts stood at US$690.9 million at the end of last month due to a biting foreign currency crisis that has battered the country since 1999. The arrears on foreign borrowings were pegged at about US$488.1 million at the end of October last year and have continued to grow despite the dearth of economic assistance to Harare by major international donors and financial institutions. "This continued build-up of arrears will, among other factors, raise the barriers to the country's access to international capital markets, lead to the downgrading of the country's creditworthiness and further erode investor confidence," Makoni told Parliament. He said the foreign loan defaults were worsened by the erratic inflows of hard cash, which fell below the country's normal monthly requirements of about US$230 million during the first six months of the year. Earlier this year the government said it had set aside almost US$500 million during the current financial and fiscal year for servicing its external commitments, although analysts pointed out at the time that the target was optimistic because of Zimbabwe's deteriorating economic fundamentals. Sources say payments for government and parastatal debts during this year will amount to US$390 million and US$99 million respectively and the amount will include both interest and capital repayments on an estimated total government and parastatal external debt stock of over US$4.5 billion. Zimbabwe has since 1999 skipped payments on its foreign commercial and concessional loans because of the shortage of foreign currency. The first time was in April 1999 when the cash-strapped government missed payments on a loan from the World Bank, a development that blocked the release of funds from other key backers of the country's stalled economic reforms. Earlier this year, the government was reported to have stopped repayments of all foreign loans and to be using the little foreign currency that trickled into the country to meet payments for fuel and electricity imports. The government owes more than US$4.5 billion to several multilateral institutions and Western countries. These include the International Monetary Fund, the World Bank, the African Development Bank, the European Investment Bank, the United States of America, Britain, France and Germany. The defaults on the external loan commitments have cost Zimbabwe crucial economic aid worth billions of dollars, triggering a crippling balance-of-payments crisis and severe shortages of fuel and other essential commodities. Harare authorities, already battling fuel, electricity and food shortages, would have to perform a juggling act with its finances in order to meet the needs of its foreign creditors and more pressing commitments at home. Makoni said the government, which has become increasingly isolated by the international community over its controversial land reforms, was intensifying efforts to restore normal relations with the outside world and to deepen Harare's involvement in regional cooperation and integration. Without giving details of the steps being taken, he told Parliament: "In order to regularise our country's standing, government has been consulting with key members of the international fraternity." |
