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Zimbabwe Seeks Debt Forgiveness

Finance Minister Patrick Chinamasa.
Finance Minister Patrick Chinamasa has reiterated comments that the cash-strapped Zimbabwe government will soon ask for debt forgiveness and launch a fresh bid to seek new credit facilities.

The International Monetary Fund has ruled out giving Zimbabwe fresh loans until it repaid its loans.

In a report published last month, the World Bank and the IMF said Zimbabwe’s eligibility to receive assistance under their Heavily Indebted Poor Countries Initiative ‘remains unclear’. This followed Harare's request for debt relief last October.

Zimbabwe’s high debts mean it will be cut off from accessing most external financing sources. It owes the IMF and the World Bank $124m and $1bn respectively.

The World Bank said Zimbabwe would need to agree a comprehensive arrears clearance framework with the international community.

"‘The country could potentially be eligible for assistance if it meets end-2004 and end-2010 indebtedness criteria and if it clears its arrears to the [Poverty Reduction and Growth Trust],’" the report said.

Chinamasa says Zimbabwe’s external debt stands at US$6,1 billion though the IMF says it tops US$11 billion. The country owes institutions such as the IMF, World Bank, Paris Club, European Investment and the African Development Bank.

Economists have warned that without foreign direct investment, the country's economic crisis would worsen.

Commenting, Zimbabwe Conference on Reconstruction and Development acting Executive Director Hopewell Gumbo told VOA's Studio 7 that an audit of those who benefitted from the loans must be carried out first before Harare can ask for a write off.

Developing countries, particularly in Africa, continue to face debilitating debt crises limiting the capacity of most African countries to develop and meet the socio-economic needs of their populace.
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