Zimbabwe’s rate of settlement, means it could take Harare over 300 years to pay off the mounting debts and interest.This comes in light of the country having taken close to a year to pay a paltry USD44,2 million recently to institutions it owes over US$1 billion each.
Data released by Treasury in its annual debt analysis showed that Zimbabwe’s external debt increased to US$13,7 billion during the period.
Harare’s unsettled debt to international lenders was estimated at US$10,7 billion early this year.
Big global lenders have turned their backs on Zimbabwe citing inability to service existing commitments.
The debt has been blamed for the country’s struggle to secure fresh bailouts from International Financial Institutions (IFIs) to stabilise its troubled economy.
The Paris Club is a group of major creditor countries whose role is to find co-ordinated and sustainable solutions to debt repayment difficulties experienced by debtor countries.
As debtor countries undertake reforms to stabilise and restore their macroeconomic and financial situations, Paris Club creditors provide an appropriate debt treatment.
These countries include Japan, the United States of America, Germany, the United Kingdom, Belgium and several others.
Zimbabwe had defaulted since 2001, after falling into an economic crisis, which saw inflation hitting a record 500 billion percent in 2008, with GDP falling by 50% during the decade ending December that year.
After paying debts owed to the International Monetary Fund two years ago and rolling out the Lima debt clearance plan in 2015, the country has failed to live up to its promise, and has been accumulating high interest on the arrears.
Speaking during an economic review webinar hosted six months ago in July, Minister of Finance Prof Mthuli Ncube said his plan was to demonstrate goodwill to the powerful economies before kicking off full-scale payments.
“We have developed an arrears clearance and debt restructuring strategy,” Ncube said.
“As government, we are now speaking to various countries to see who could be a sponsor because we need a sponsor and once we are successful we will be able to move on to the next phase, which is really to tackle those arrears with the World Bank and the African Development Bank, the preferred creditors.
“We are working hard on that. I must say that for now we have taken the step of beginning to pay token payments to the World Bank, the African Development Bank and the European Investment Bank.
“We are making those payments to show that we are good debtors.
“We have taken yet another step, which we have not done in the last 20 years, which is to start paying the 17 Paris Club creditors.
“Again we have begun making token payments to them whether we are looking at Italy, UK, Japan or US. We have started paying them because as a country we ought to be known as good debtors and not bad debtors,” he noted.