EU backs Zimbabwe’s debt clearance plan, urges commitment to ‘painful’ reforms

HARARE,– The European Union will support Zimbabwe’s efforts to gain approval for its strategy to repay its external arrears at a meeting of international creditors next month, but says the country must ‘walk the talk’ and implement the promised reforms which it said could be painful.

EU backs Zimbabwe’s debt clearance plan, urges commitment to ‘painful’ reforms

The southern African country owes foreign creditors about $10 billion and will present and seek support for its strategy for arrears clearance on the sidelines of the annual meetings of the World Bank and the International Monetary Fund in Lima, Peru, next month, which could pave way for new funding.

Zimbabwe has declined to disclose details of the plans but the head of the EU delegation, Philippe Van Damme on Monday said it ‘puts a lot of emphasis on improving public finance management and accelerating public enterprise reforms.’

“The reform agenda you will present to Zimbabwe’s creditors in Lima is ambitious, and demanding,” Van Damme said at a signing ceremony for five financial agreements amounting to $98 million under 11th European Development Fund.  The funds are part of the $270 million agreement signed in February this year in development assistance to support agriculture, health and institutional building.

“But you will now have to go further, walking the talk, and move to the concrete, sometimes painful, operationalisation of the promised reforms,” added Van Damme.

While Zimbabwe has started reforms in the financial sector and on the labour market, Van Damme said it still has not made enough progress in building an inclusive electoral environment while there are still issues outstanding in the application of the rule of law.

As a result, the EU still maintains “some limited, but highly symbolic restrictive measures in place” which should act as “an extra incentive to engage and find ways to lift the final obstacles to a full normalisation of relations.”

The EU lifted its 12-year suspension of direct financial aid to the government of Zimbabwe at the end of October last year but maintains restrictions on President Robert Mugabe and his wife while a state-owned arms firm also remains under an arms embargo.

“We still observe an investors’ community, attracted by the potentialities of the Zimbabwean economy, but hesitant to take the final hurdles and to pledge funding because of lack of clarity on property rights, doubts about the predictability of the legal framework and its application, and difficulties in doing business,” said Van Damme.

Finance minister Patrick Chinamasa said Zimbabwe was committed to its reform agenda, but added normalising political relations with the EU would bring more investment from the bloc.

“Without the political normalisation, the business delegations that come to Zimbabwe remain on the fence, not entirely because our environment is not right to receive them, but they get their cue from their political leaders,” said Chinamasa.

“Until normalisation of political relationships, I do not think we will see many investors from Europe coming to Zimbabwe. Once that is sorted my belief is that they will come off the fence and invest in Zimbabwe. I believe they have already made up their minds where they want to invest.”

He said the mission to Italy, Germany, France and Brussels (Belgium) led by central bank governor John Mangudya to seek support for the debt strategy, had gone well and that “Europe should be fighting in Zimbabwe’s corner.” – The Source

Related Posts
IMF paints dire picture of global growth this year
WASHINGTON — A relentless deceleration in the economies of the developing world will cause global growth to slow this year and only pick up a bit more pace in 2016, ...
READ MORE
Glitches stall Atlas Mara bid to buy out BancABC directors
ATLAS Mara says it has experienced some administrative glitches in acquiring the shares held by three BancABC departing executives but hopes to tie up the deal next month. BancABC founding chief ...
READ MORE
Magic of maggots means survival for many poultry farmers in Zimbabwe
HARARE — Lovemore Kuwana cheerily lifts the lid of a container full of fresh maggots in his backyard, which he will feed to the poultry he keeps once the worms ...
READ MORE
Zimbabwe, Zambia economies trip on water shortage
Harare - Low water levels at Kariba dam will further worsen power generating capacity in Zimbabwe and Zambia, power utilities in the two southern African countries say, with power deficits ...
READ MORE
ZIMRA enforces new import tariffs
ZIMRA has begun enforcing the duty increases and reductions for several goods and items in line with government’s proposal and subsequent statutory instruments on customs and excise duty gazetted on ...
READ MORE
Businesses grumble over fiscal devices
SOME businesses which are expected to be in the process of installing fiscal devices are still grumbling about the price of fiscal devices, but the Zimbabwe Revenue Authority (Zimra) is ...
READ MORE
Poor sales drive Truworths FY revenue lower
HARARE,– Clothing retailer Truworths reported a drop in revenue from $23,1 million to $19,6 million in the full year to July on the back of declining sales. Sales in the year ...
READ MORE
Investment climate reforms to continue: Mnangagwa
HARARE - The government says it will continue to assess the business environment to identify areas that require improvement in line with enhancing the ease of doing business. Government is in ...
READ MORE
South Africa’s political uncertainty, reform of state firms a concern: S&P
JOHANNESBURG (Reuters) - The slow reform of South Africa's state-owned firms and the upheaval swirling around the finance minister pose risks to the country's investment grade credit rating, an executive ...
READ MORE
Why Companies Can’t Turn Customer Insights into Growth
Despite their best intentions to focus on customers’ needs, many companies spend more time looking inward. If you are not convinced of your organization’s internal focus, try this experiment: In ...
READ MORE
IMF paints dire picture of global growth this
Glitches stall Atlas Mara bid to buy out
Magic of maggots means survival for many poultry
Zimbabwe, Zambia economies trip on water shortage
ZIMRA enforces new import tariffs
Businesses grumble over fiscal devices
Poor sales drive Truworths FY revenue lower
Investment climate reforms to continue: Mnangagwa
South Africa’s political uncertainty, reform of state firms
Why Companies Can’t Turn Customer Insights into Growth

Arts & Entertainment