Zimbabwe Secures $1,2 Billion To Clear World Bank Debt, Sets Conditions

Finance Minister Patrick Chinamasa has said Zimbabwe has secured $1,2 billion needed to clear World Bank arrears. Chinamasa said Zimbabwe will pay back the money once the United States based financial institution announces the amount it will give the country as fresh funding.

Although Minister Chinamasa did not disclose the source of the loan to repay the World Bank, indications are that Afrexim Bank is assisting Zimbabwe. Said Chinamasa:

As you are aware, we cleared our arrears with the International Monetary Fund (IMF) and the rule is, we must address our indebtedness first to other multilateral institutions. All I can say is that we have succeeded to mobilise a commercial loan, which is cheaper than what the World Bank is now charging us, and that is when we know what new money the World Bank will give us, then we should be able to complete the transaction. We cannot pay $1,2 billion without the expectation of new money. It does not make sense for us and they also recognise it does not make sense. I am happy to observe that they are coming our way in terms of that understanding. In our conversation with the World Bank, we have been saying the arrears come to $1,2 billion and it is a large amount of money to pay from a struggling economy. They should indicate to us what they will pay us by way of new money into the economy. We have expectations that when we clear the arrears we should get new money.

Chinamasa said the World Bank and the African Development Bank (AfDB) have been  carrying out an exercise to determine Zimbabwe’s needs across sectors with a view to providing fresh funding.

Also Read:

• Despite paying off IMF arrears, Zimbabwe will not get any credit until it clears all debts

• IMF removes Zimbabwe sanctions but says no new funding without reforms

More: Herald