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Zimbabwe's Domestic, External Debt Rises to $10 Billion

Finance Minister Patrick Chinamasa. (File Photo/Irwin Chifera)

Finance Minister Patrick Chinamasa says Zimbabwe’s domestic and external debt is now reaching the $10 billion mark, a situation that is worrying President Robert Mugabe’s government.

Chinamasa told VOA Studio 7 on Thursday that the country’s coffers are empty and as a result, Zimbabwe is not in a position to repay loans owed to international money lending institutions such as the World Bank, International Monetary Fund, European Development Bank and the African Development Bank, among others.

“The outstanding domestic and foreign debt as verified is now $9.9 billion. I need to emphasize that this debt overhang is a very inhibiting factor in securing fresh money, mobilizing fresh money, fresh resources,” he said.

He added that “this is a matter that we are seized to see that it is tackled and it’s going to be an ongoing process.”

The minister said government is in the process of crafting a law that would result in the establishment of a debt management office within the finance ministry.

“We have to claw our way out of the situation and some of the measures we have taken is basically to ensure that as we go into the future, we have got an institution that monitors debt obligations,” said Chinamasa.

He said the proposed law would require all ministries, parastatals and local authorities to seek permission to borrow from the finance ministry.

At the same time, Chinamasa said his ministry is engaging international money lending institutions on repaying debts and possibilities of getting new lines of credit.

He said any sourced funds will be used for long term projects such as road construction and power generation.