IMF flags Zimbabwe’s recent loan

HARARE- IMF has confirmed that Zimbabwe has recently acquired mineral collateralized debt with an established external creditor, a development which it says has a potential of complicating negotiations with institutions already owed legacy external debts.

In a 62 page Staff Monitored Program update on Zimbabwe released on Friday, the multilateral lender said the government of Zimbabwe has expressed renewed commitment to reengage with the international community, beginning by clearing multilateral arrears with the IFI’s, and has made token payments to these.

The IMF went on to say Zimbabwe has however accumulated further external debt in a bid to cushion its raging economic crisis, which has a potential impact of complicating negotiations with external creditors to restore debt sustainability.

Over a fortnight ago, government announced that it has secured $500 million in an external line of credit which it would soon draw down, partially to satisfy interbank forex demand and ease shortages.

An international publication, Bloomberg went on to dig out that the Afreximbank loan has been securitized by platinum mineral resources on a yet to be developed mine on the Great Dyke. Authorities however declined to confirm the development.

Zimbabwe’s external debt stood at $8.83 billion as at December 2018, of which $5.6 billion is in arrears. $3.3 billion of the total external debt is owed to multilateral creditors including World Bank and the Africa Development bank.

The excessive debt distress levels have prevented new financing from the IFIs and limits access to external financing to non-traditional official and commercial creditors. Zimbabwe has instead resorted to internal sources of private funding in turn ballooning domestic debt.

IMF estimates domestic debt at around $7.13 billion much of which has been accumulated over the last 3 years. The growth in domestic debt has spurred money supply to levels which inspired inflation and exchange rate losses in a multicurrency regime.


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