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London Group Pushes for Audit of Zimbabwe's $8 Billion Debt

A London-based non-profit organization, Jubilee Debt Campaign, has started lobbying lawmakers in the United Kingdom and Zimbabwe to push for the auditing of the nation’s ballooning external debt projected to hit the $8 billion mark by the end of 2012.

Jubilee policy officer Tim Jones told Studio 7 Wednesday his organization has teamed up with the Zimbabwe Coalition on Debt and Development and other stakeholders to press for the audit and subsequent cancellation of the debt.

Jones said they are calling for the involvement of ordinary people in making decisions on government borrowings instead of leaving it to the state which has over the years almost mortgaged the country to international finance institutions.

“We believe that the debt audit will ensure that government borrowings will be questioned for the benefit of future generations,” he said.

Zimbabwe’s Finance Minister Tendai Biti has suggested that the state should seek the cancellation of its debt through the unpopular indebted poor countries initiative. President Robert Mugabe’s Zanu PF strongly opposes such moves.

The inclusive government adopted the implementation of a holistic and internally driven strategy to deal with the external debt through requesting for debt relief, the injection of fresh financing from development partners and the effective utilization of the country’s natural resources.

According to Biti, the full extent of Zimbabwe’s external indebtedness and the effect of capitalization of interest due to arrears accumulation should be quantified.

As at the end of December 2010, the country’s unvalidated external debt position was estimated at $6.9 billion of which almost $4.8 billion was accumulated arrears.

Multilateral institutions are owed a total of $2.5 billion of which the World Bank is owed $1.1 billion, the International Monetary Fund $550 million, the African Development Bank $529 million, and the European Investment Bank $221 million. Arrears to the IMF amount to $140 million.

Total bilateral debt amounts to $2.4 billion of which Paris Club creditors account for $2 billion and Non-Paris Club $361 million.