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Dialogue on Zim debt settlement crucial – US – The Zimbabwe Mail

Biden and Mnangagwa

According to the United States, Zimbabwe’s Structured Debt Dialogue, which is anchored on a series of economic and political governance reforms, is critical to unlocking concessional financing for the debt-ridden southern African country.

BERNARD MPOFU

The Treasury has resumed negotiations with creditors and the international community as it tries to resolve Zimbabwe’s nagging debt burden. With the country still in debt trouble amid limited credit, public debt has continued to rise, driven by external arrears and old debts.

Official figures show that despite making token payments in recent years, Zimbabwe’s total debt burden has risen to $18 billion by December 2023.

Two years ago, Zimbabwe established a structured dialogue platform – led by African Development Bank President Akinwumi Adesina and facilitated by former Mozambican leader Joaquim Chissano – with all creditors and development partners to institutionalize negotiations on economic and governance reforms in support of eliminating payment arrears and the debt repayment process.

Political interference and policy reversals are often cited as some of the reasons preventing potential investors from injecting capital into the debt-ridden southern African country.

“The Zimbabwe Democracy and Economic Recovery Act (Zidera) has not changed. Zidera is a legislative act and not a sanction,” the US Embassy in Zimbabwe said in a statement on the X-handle.

“The United States has never used Zidera to oppose loans from international financial institutions or debt restructuring for Zimbabwe. Zidera outlines a clear roadmap for the United States to support the Zimbabwean government’s access to concessional financing and possible debt restructuring, but this can only happen once the Zimbabwean government pays its outstanding debts to the international community. That is why the dialogue facilitated by the AfDB is so important. The issues of democratic governance, economic reform and land reform addressed in that dialogue relate to many of the issues raised in Zidera.”

In March, US President Joe Biden ended the sanctions program on Zimbabwe and replaced it with the Global Magnitsky regime that targets 11 individuals, including President Emmerson Mnangagwa, and three companies.

Washington accuses the designated individuals and companies of aiding human rights violations in Zimbabwe. Harare rejects the charges and wants the sanctions lifted.

As consistently reported by The NewsHawksZimbabwe faces a huge task to improve its position on the Mo Ibrahim Index as the country commits to sweeping political governance reforms to take pressure off creditors.

The Mo Ibrahim Foundation defines governance as the delivery of political, social, economic and environmental goods that citizens have a right to expect from their state, and that a state has a responsibility to deliver to its citizens.

According to the Arrears Clearance and Debt Resolution Process Governance Reforms Matrix, Zimbabwe has agreed on seven sub-indicators under the Mo Ibrahim Index and has pledged to improve its rankings.

The sub-indicators are: Democratic elections; absence of violence against civilians; impartiality of the legal system and judicial processes; space for civil society; institutional checks and balances; and transparency in public procurement procedures.

Zimbabwe currently scores 49.54 (in 2022) out of 100.0 in general governance and ranks 29th out of 54 in Africa. The country scores lower than the African average (48.9) and lower than the regional average for southern Africa (54.2).

Seen through the implementation matrix The NewsHawksZimbabwe aims to improve its governance index this year to 51.03 from 49.54 last year. Next year the country will see the score improve to 52.56, before rising further to 54.14 the following year.

Published since 2007, the Ibrahim Index of African Governance assesses governance performance in 54 African countries over the last available ten-year period.

It provides a framework and dashboard for any interested public to assess the delivery of public goods and services and public policy outcomes in African countries. – Newshawk