Why Zimbabwe is fixated with clearing arrears with World Bank and AfDB

Zimbabwe, which is currently struggling to supply the nation with fuel, is fixated with clearing its $2 billion arrears with the World Bank and the African Development Bank because this is the only way to open doors to international credit to revive the country’s industry.

Finance Minister Mthuli Ncube told the nation’s bankers that this was one of the twin problems that his budget for 2019 wanted to address.

The other was the twin deficit challenge.

“The reason why we are so fixated on arrears clearance is that it is not easy to source credit lines globally to support industry. It’s not easy,” he said. “This is why banks have to talk to the central bank all the time.”

He said the central bank was the only bank with credit standing to be able to do that with support from treasury.

The central bank has been struggling to raise enough foreign currency to procure fuel for the country. Only a few weeks ago, it had to bail out millers when they ran out of wheat.

The government yesterday released $60 million for fuel but this will last only three weeks.

Ncube said the government was determined to clear its arrears in the next 12 months.

“We are fixated with that issue. We want to deal with it. We are determined as a government to deal with it over the next 12 months. And I am sure we will succeed. I am certain we will succeed…”

Ncube said he was bullish because there was tremendous goodwill for Zimbabwe in the international community.

“We have tremendous goodwill out there for Zimbabwe. We don’t even realise it. Everyone wishes us well.  All the countries we owe money wish us well and they would like to see us prosper,” he said.

Ncube said once Zimbabwe clears its arrears this will open doors for opportunities.

But as he rightly said, most Zimbabweans do not realise that and are not likely to believe him because the arrears clearance has been on the cards for years.

And for most, things have gotten worse since he was appointed Finance Minister.

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