Although the international community has welcomed Zimbabwe’s plans to clear its arrears to international financiers so that it can access new loans, they stressed that implementation of reforms were necessary to achieve debt resolution.
Zimbabwe plans to clear its arrears of about $2 billion to the International Monetary Fund, the World Bank and the African Development Bank by April to access new loans.
But it appears that it will not be as simple as that.
Britain’s Under-Secretary of State for International Development Baroness Verma told the House of Lords this week that bilateral creditors welcomed Zimbabwe’s plans in Lima in October.
“Bilateral creditors at the meeting, including the UK, broadly welcomed the intention of the Government of Zimbabwe to work towards arrears clearance, but stressed that implementation of reforms would be necessary to achieve debt resolution,” she said.
Zimbabwe has been accused of policy inconsistencies for some time with government ministers contradicting each other on key policies meant to facilitate foreign direct investment like the Indigenisation Act.
Although the government seemed to be softening on the law that says foreign companies with a value of more than $500 000 must be majority owned by locals, President Robert Mugabe told the party annual conference at the weekend that the law still stands.
“There are companies in this country that still refuse to accept our empowerment policy in the mining sector. Well, this is 2015 and, of course, we are in December, the end of year but certainly come January and it's 2016, that stubbornness and resistance we say should end in 2015. In 2016, we will not accept a company which refuses and rejects our policy of indigenisation and empowerment in a manner in which we described," he was quoted by The Herald as saying.
"Some have been crying that sanctions, sanctions, that you are too hard, why don't you accept what the Americans say, what the British say. No, we have our own philosophy, ideology and we believe that our natural resources are our own. We don't share them with anyone else except ourselves."
Q & A:
Lord Oates Liberal Democrat– To ask Her Majesty’s Government what representations they have made regarding the government of Zimbabwe's attempt to access external funding from multilateral financial institutions including the IMF, World Bank and African Development Bank.
Baroness Verma -The Parliamentary Under-Secretary of State for International Development– The Government of Zimbabwe has been in arrears to the International Financial Institutions for over a decade. This prevents Zimbabwe from accessing any new financing for development from the World Bank, IMF and African Development Bank.
The Government of Zimbabwe presented its plans to clear multilateral arrears at a side meeting during the World Bank and IMF Annual Meetings, in October. Bilateral creditors at the meeting, including the UK, broadly welcomed the intention of the Government of Zimbabwe to work towards arrears clearance, but stressed that implementation of reforms would be necessary to achieve debt resolution.