After 20 years of not paying its debts, Zimbabwe is taking steps to clean up its balance sheet and its image by making payments to major creditors.
Even if admittedly token amounts, the government hopes they will build goodwill towards Zimbabwe.
Finance Minister Mthuli Ncube announced during a video conference this month that Zimbabwe had made its first payments in two decades to a group of rich countries known as the Paris Club.
“We have taken the step of beginning to pay token payments to the World Bank, the African Development Bank and the European Investment Bank,” Ncube said.
Clearing Zimbabwe’s debts, or simply catching up on payments, is a mammoth task.
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The $11 billion that Zimbabwe owes to foreign lenders amounts to about 71 percent of the country’s GDP. Some $6.5 billion of the total is payments that are in arrears.
When Zimbabwe’s economy collapsed 20 years ago under then-President Robert Mugabe, the country defaulted on its loans.
President Emmerson Mnangagwa, who ascended to power following a coup in 2017, wants to re-establish connections with Europe and the United States, which had been largely severed due to Mugabe’s election rigging and human rights violations.
Western governments froze their assets in protest of human rights crimes, and have shown little interest in easing the restrictions so far.
In July, the United Kingdom imposed fresh sanctions against a Zimbabwean official for illegally redeeming treasury bills for ten times their face value.
*This article was written by Gerald Gekara for Uzalendo News. Email: uzalendonews24@gmail.com to submit your story.
