Uncovering Zimbabwe’s debt
6. What are Zimbabwe’s choices? Zimbabwe is currently in default on most of its debt from the western world, although it is taking out new loans and repaying lenders such as China. The Zimbabwean coalition government has recently set up a new debt management office and has opened talks with creditors on resolving the debt. The government says it intends to implement a hybrid option of taking part in the ‘best’ parts of the Heavily Indebted Poor Countries (HIPC) initiative and using revenue from diamond sales to pay off the debt.166 However, for the creditors which run the HIPC scheme, there is at the moment no option for a country to choose which bits it wants to take part in. What creditors require of a country going through HIPC is set out overleaf. Below we look at the options for Zimbabwe and what they would mean.
“Given Zimbabwe’s levels of socioeconomic distress, activists and civil society organisations maintain that the repayment of external debt should not be given any priority until a proper national debt audit has been carried out, which will show whether any of the debt is odious and illegitimate. Side by side with this, there is a strong view that neither debt cancellation (while desirable) nor new loans (which are necessary) should be extended unless the loan contraction and debt management legislation and processes are thoroughly reviewed – so it is imperative that the debt audit is carried out now.” 165 Deprose Muchena, Open Society Initiative for Southern Africa
Tim Jones / Jubilee Debt Campaign
Members of Zimbabwean civil society meet to discuss alternatives for dealing with debt and to promote responsible lending and borrowing.
Uncovering Zimbabwe's Debt