The government has secured a $1.7 billion loan to pay off its debts to the World Bank and to the African Development Bank. It owes $1.1 billion to the World Bank and $600 million to the AfDB. However, the source of the loan is still to be revealed.
In an interview Finance and Economic Development, Minister Patrick Chinamasa told Bloomberg
It should reduce our country-risk profile and also make us eligible for access to soft windows of those institutions — we need new inflows,
It also opens up to other institutions to do business with us and also make us able to access international capital.
Clearance of debt arrears is expected to attract in the short to medium and long term foreign and domestic investment, given perceptions of lower country risk, and would be expected to open the door to foreign finance inflows and possible debt treatment by the Paris Club and non-Paris Club Bilateral Creditors through an IMF financing programme.
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