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DEBT-RIDDEN Zimbabwe’s total official Public and Publicly Guaranteed (PPG) debt is estimated at ZW$2.2 trillion for domestic debt and US$14 billion for external debt


Speech by African Development Bank president Dr Akinwumi Adesina on Zim debt plan



Mangwanani! Good morning!

Thank you for honouring the invitation of H.E. President Mnangagwa to the second dialogue platform meeting on the arrears’ clearance and debt resolution process for Zimbabwe.

Today marks the beginning a new hope for Zimbabwe. The Holy Bible says, “for everything there is a season, a time for every purpose under heaven…a time to cast away stones and a time to gather stones together; a time to break down, a time to build up; a time to kill, a time to heal; a time of war, and a time of peace”.

We gather mindful that over twenty years of sanctions have hurt Zimbabwe and the people of Zimbabwe.

The once thriving private sector of Zimbabwe has imploded. International banking has almost dried up with 102 correspondence banking relations lost in the past one decade. Today, 90% of the economy is now informal. Zimbabwe’s once thriving contribution as the nerve center of the SADC region has been broken, lowering regional trade and investments. The once thriving National Railways of Zimbabwe, with a rolling stock of 12.5 million tons in the 1990s now accounts for under 2.5 million tons. The number of people living in extreme poverty now stands at 44%.

The people of Zimbabwe have suffered enough. The young people of Zimbabwe deserve to have their once prosperous country back. They cannot continue to suffer for a past they did not create. They deserve a new and prosperous future. It is time now to rebuild what has been broken; it is now time to refrain from casting stones; it is now time to heal; it is now time for peace.

I wish to commend the people of Zimbabwe for their resilience. You have been down, but you never gave up. You believe that hope will one day arise.

Together, we gather today to map out a pathway for hope.

The sanctions have led to arrears and debt accumulation over the years.

Total consolidated debt of Zimbabwe stands at US$17.5 billion. Debt owed to international creditors stands at US$14.04 billion, while domestic debt stands at US$3.4 billion. Debt owed to bilateral creditors is estimated at US$5.75 billion, while debt to multilateral creditors is estimated at US$2.5 billion. The country is in arrears for servicing its debt, with arrears to multilateral development banks, including the African Development Bank, the World Bank, and the European Investment Bank.

While token payments are being made to service the debt, it is now time for a comprehensive arrears’ clearance, debt resolution and debt restructuring for Zimbabwe. Zimbabwe cannot run up a steep hill of economic recovery carrying a heavy backpack of debt on its back.

Despite these challenges, Zimbabwe is recovering.

The economy recovered from the COVID-19 pandemic, posted GDP growth rate of 6.3% in 2021, although growth declined to 3.5% in 2022 due to continued climatic shocks which adversely affected the performance of the agricultural sector and the impacts of the Russian war in Ukraine which have driven up energy and food prices.

While significant and highly commendable economic reforms have been implemented, the macro-economic environment continues to be challenging with very high levels of inflation and currency depreciation. Investments in mining are bouncing back, while the performance of the agricultural sector has been impressive. I was pleased to hear from President Mnangagwa that Zimbabwe has been able to achieve self-sufficiency in wheat production. I am pleased that the US$25 million support of the African Development Bank for emergency food production is helping Zimbabwe to recover from the effects of the Russian war in Ukraine.

The green shoots are coming back, but much still needs to be done.

That is why I accepted the invitation from President Mnangagwa for me to play the role of Champion for arrears clearance and debt resolution for Zimbabwe.

I accepted because I know the potential of Zimbabwe. I lived and worked here and was here during the challenging times of the late 1990s to 2003. I know Zimbabwe. I love Zimbabwe. I accepted because I see that the time is now for us to all work together to build a new and prosperous Zimbabwe. I am delighted that H.E. President Chissano, the former President of Mozambique, a revered African leader, accepted to serve as the Facilitator for this process.

In my meetings and discussions when I visited Zimbabwe in June 2022, I was pleased with the high level of leadership and commitment of H.E. President Mnangagwa towards this process. In my meetings with several development partners over breakfast in the home of the German Ambassador, I sensed an openness and readiness to engage in dialogue focused on solutions.

President Mnangagwa has been active in marketing Zimbabwe and its progress. At the Africa Investment Forum held in Abidjan in November 2022, at a special investment session on Zimbabwe, he laid out his heart on the country’s hope and prospects “Zimbabwe is open for business”, he said. He called for massive investment opportunities in agriculture, mining, services, infrastructure, especially energy.

The African Development Bank is leading work to support the construction of the Batoka Gorge hydropower dam that will unlock renewable energy and provide 2 400 MW of electricity. We are also working with partners to construct the power transmission line that will link Zimbabwe, Zambia, Botswana, and Namibia. Vast opportunities exist for the private sector, in the hospitality and tourism industry, as well as in the construction and rehabilitation of the railways network that will open regional trade and investments into its neighboring countries and further spur economic growth and development of the SADC region.

During its challenges, Zimbabwe has not been alone. At the African Development Bank, the Zimbabwe Multi-donor Trust Fund helped to provide succor to the population over the years. With a total financing of close to US$150 million, it rehabilitated essential infrastructure such as water, sanitation, and energy distribution, benefitting 5 million people. I would like to thank the donors to the Fund, namely Germany, Switzerland, Sweden, UK, Norway, Denmark, and Australia for their generous support that made this possible.

I would like to assure the government that you will not be alone.

Your Excellency, Mr. President, Today, you are surrounded by goodwill and commitment of development partners. Their presence in large numbers shows that we are ready to engage in constructive and transparent dialogue. Let me assure you that from my discussions with the partners, there is no political or sinister agenda behind this engagement.

There is no agenda on regime change. There is only one agenda: reforms for lasting change.

In my role as Champion of the arrear’s clearance and debt resolution for Zimbabwe, I will be open to all, hear all, and together with you, President Mnangagwa and President Chisanno, we will take all on board.

To move this process forward, the African Development Bank approved US$4.1 million for an “Arrears Clearance and Governance Enhancement Project”.

This is supporting the dialogue platform and the works of President Chissano, the facilitator, Dr Luisa Diogo, former Prime Minister of Mozambique, the Senior Technical Advisor, as well as two technical advisors, Dr Alexis Ferrand (Economic Advisor) and Dr James Tsabora (Governance Advisor) who are supporting economic and governance working groups.

I highly commend President Mnangagwa and the Government of Zimbabwe for putting forward a three-part central-pin strategy which includes economic reforms, governance reforms and the compensation of commercial farmers.

This shows good will. We must now ensure that all the elements of the central-pin strategy are delivered.

I am confident that the Sector Working Groups that have been established for structured dialogues on these issues will build much needed trust, momentum, and implementation. The governance working group would allow us to tackle and make measurable progress on critical issues of freedom of speech, human rights protection, and implementation of laws in line with the constitution, as well as the implementation of the Motlanthe commission of inquiry and compensation of victims. And we must show progress on the Zimbabwe Democracy and Economic Recovery Act (ZIDERA). All of which should make for peaceful, free, and fair elections. They will also remove headwinds on our path to arrears clearance and debt resolution.

The economic reforms working group would allow us to make progress on exchange rate reforms and quasi-fiscal operations of the Reserve Bank of Zimbabwe, reforms of State-Owned Enterprises and a staff monitored program (SMP) by the International Monetary Fund. Hopefully and preferably, this would be a “wet SMP program”. There must be incentives for Zimbabwe’s efforts on reforms, while mitigating social impacts on the vulnerable.

It is hard to swallow dry maize meal “Sadza” without water.

And critically, the central pin, is the full compensation of the commercial farmers under the Global Compensation Deed and the full implementation of the Bilateral Investment Promotion Protection Agreement, and the implementation of the laws that assure long term security of titles to land.

The past is behind us.

We must move forward!

And we must focus on implementation.

Your excellencies, There is readiness for solutions.

There is clear leadership and commitment from President Mnangagwa.

There is strong commitment from the Government of Zimbabwe.

There is commitment and readiness from the international community.

There is readiness and commitment from bilateral and multilateral financial institutions and creditors.

There is readiness and commitment from the private sector and civil society.

The time of hostility is over.

Now is the time for peace.

So let us seize the moment.

Let us build trust.

Let us rebuild Zimbabwe.

Let us deliver new hope for a prosperous Zimbabwe!

Thank you very much.

Ndokutendai zvikuru!

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