Chissano to facilitate debt talks
FORMER Mozambican president Joaquim Chissano (pictured) has been appointed to facilitate Zimbabwe’s first dialogue with its creditors as the financially beleaguered nation seeks to normalise relations with the international community, The NewsHawks has established.
Following several failed attempts to settle arrears with international financial institutions (IFIs) such as the World Bank, International Monetary Fund and the African Development Bank, which all enjoy preferred creditor status, Zimbabwe, which has been struggling to access long-term concessional capital, is considering a change in tack.
Official figures show that Zimbabwe’s total public and publicy guaranteed debt stock increased from ZW$1.9 trillion as at end December 2021, to ZW$10.97 trillion as at end September 2022, representing a 477% increase, mainly on account of the 2 depreciation of the ZW$ against the US$, which depreciated from US$1: ZW$108 as at end December 2021, to US$1: ZW$622 as at end September 2022 (476% depreciation).
Chissano, a politician who served as Mozambique’s second leader from 1986 to 2005, took for over from Samora Machel is who was killed in a plane crash.
Chissano is credited with transforming the war-torn Mozambique into one of the most successful African democracies. After his presidency, Chissano became an elder statesman, envoy and diplomat for both his home country and the United Nations. Chissano also served as African Union chair from 2003 to 2004.
Sources familiar with the developments told The NewsHawks that following the drafting of Zimbabwe’s debt and arrears clearance plan early this and the assumption of African Development Bank president Akinwumi Adesina as the team leader of Zimbabwe’s quest to break its debt cycle, a lot has been happening in the background.
“The government of Zimbabwe had the first dialogue meeting with its creditors on December 1 and that has since been re-scheduled. Former president of Mozambique Chissano has been appointed as a facilitator,” one of the sources said.
Just last week, the European Investment Bank (EIB), one of Zimbabwe’s multilateral creditors, says it is keen on working with the southern African nation as it seeks to settle its arrears.
According to the new debt plan, Zimbabwe is exploring traditional debt relief options, especially the Highly Indebted Poor Country (HIPC) Initiative, which provides maximum debt relief for beneficiary countries and non-HIPC initiatives.
Presenting the 2023 National Budget last week, Finance minister Mthuli Ncube told lawmakers the government has intensified its re-engagement with creditors.
“As part of actualisation of the ACDRR Strategy, the president of the African Development Bank Group (AfDB), Dr A. A. Adesina is the country’s champion of arrears clearance and debt resolution process with the IFIs and bilateral creditors,” Ncube said.
“The African Development Bank (AfDB) has also extended a US$3 million grant for technical assistance to Zimbabwe under the Arrears Clearance and Governance Enhancement Project. With this technical assistance, Government is in the process of establishing and formalising a structured Dialogue Platform with all creditors and IFIs, leading to the convening of a High-Level Debt Resolution Forum with all creditors in early 2023. The aim is to build consensus among all creditors and stakeholders on the reform agenda the options, process and procedures of resolving the country’s external debt overhang.”