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Pressure Mounts for Zimbabwe to Repay Huge Debts

  • Blessing  Zulu

FILE - The developments in Belgium might open flood gates for entities owed money by Zimbabwe to seize the country’s assets

FILE - The developments in Belgium might open flood gates for entities owed money by Zimbabwe to seize the country’s assets

Pressure is mounting on the cash-strapped Zimbabwe government to settle its huge external debt or risk having its assets seized.

The country may also be forced to fork out millions of dollars in paying legal costs to challenge the seizures.

Harare has been forced to dispatch a legal team to Brussels, Belgium, to intervene after authorities there allowed South African-based Amari Platinum holdings to seize $45 million earned from diamond revenue to recover a $500 million debt owed by the government.

This came after a botched platinum mining deal between the firm and the ministry of mines in 2010. But after Harare claimed that it had resolved the Amari issue, a group of 12 former farmers also pounced on the diamond revenue in Brussels.

The Dutch farmers have been battling with Harare for $45 million they were awarded in 2009 by the International Centre for Investment disputes for breach of bilateral investment following the 2000 land redistribution exercise.

In his mid-term fiscal policy review last week, Finance Minister Patrick Chinamasa said Zimbabwe is saddled with an “unsustainable external debt overhang amounting to $8.8 billion as at end June 2014.”

He added that the debt distress has continued to undermine the economy’s capacity to meet debt servicing obligations, resulting in the accumulation of external payment arrears since 2000.

Debtors have previously threatened to impound Air Zimbabwe planes for its failure to service its huge debts. Chairman of the Zimbabwe Mining Development Corporation, David Murangani, refused to comment on the developments saying he is still consulting.

Human rights lawyer Dewa Mavhinga, chairman of the Crisis in Zimbabwe Coalition, told Studio 7 that the developments in Belgium might open flood gates for entities owed money by Zimbabwe to seize the country’s assets.

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