Failure is not an option

ZIMBABWE has taken bold steps towards resolving its arrears and debt obligations to international lenders. Last year, President Mnangagwa appointed African Development Bank (AfDB) president Dr Akinwumi Adesina (AA) the country’s arrears clearance and debt resolution champion to lead Government’s debt resolution initiative.

Our Correspondent WALLACE RUZVIDZO (WR) sat down with Dr Adesina on the sidelines of last week’s Second Structured Dialogue Platform meeting on the arrears clearance and debt resolution process to discuss the country’s debt restructuring programme.

********

WR: How have the international lenders responded to Zimbabwe’s overtures towards servicing its arrears and debt obligations?

AA: Firstly, I want to say that Zimbabwe is servicing its debt obligations.

It continues to make payments to the African Development Bank (AfDB) and the World Bank.

However, the total amount of debt is still quite huge.

Zimbabwe’s consolidated debt is about US$17,5 billion, out of which roughly US$14,04 billion is owed to international creditors and US$3,4 billion is owed to domestic creditors.

From the international creditors, there are bilateral and multilateral debts.

Out of that, the bilateral debt is about US$5,7 billion and the multilateral debt stands at US$3,5 billion.

So, we are having a collective effort to try and help Zimbabwe deal with the quantum of debt that it has.

Zimbabwe cannot run up a hill of economic recovery while carrying this volume of debt on its back that has accumulated over time as a result of sanctions.

So, we are committed to an arrears clearance and debt resolution framework that will allow Zimbabwe to clear all its arrears and to restructure its debt with the creditors — multilateral, bilateral and private creditors.

That is why these dialogues were set up to make sure all parties involved are around the table and this is the second dialogue that we have had today (Thursday).

That is why we are focusing on things critical to all the partners, which are economic reforms, governance reforms, and also the central issue, which has got everybody to this point, which is compensating the farmers whose land was taken from them, so land reform and land compensation.

If we make good progress in all these areas, we should be able to see coalescing of the creditors around the table and say: “Let’s clear the arrears and restructure the debt so that Zimbabwe can continue to run and be more prosperous.”

WR: How much do you think dialogue is critical to Zimbabwe’s debt clearance strategy?

AA: Well, it is the only way because Zimbabwe is under obligation to meet its debt obligations to all the creditors and there is no other way than dialogue that produces results and I am very positive about that.

We have never had so much goodwill around Zimbabwe, but clearly, fighting has not produced the result.

So, dialogue — sensible, practical, pragmatic, inclusive dialogue — is what has got us where we are today and that is the path to take.

WR: Looking into the future, what do you see as the end result of this dialogue initiative?

AA: Let me tell you why we are doing this.

We are doing this because of the people of Zimbabwe.

Take for example, kids who were born 23 years ago do not even know the Zimbabwe I lived in.

I worked here for five years and it was a very prosperous country and it was a breadbasket, not only for the Southern region but for Africa as well.

It created a lot of jobs and the universities were first class.

All the schools and medical facilities were first class. Everybody saw Zimbabwe as the jewel of Africa but this young generation did not see that.

They grew up in a very different environment, so that is why we are doing this.

Failure is not an option!

We are doing this so that Zimbabweans can have their country back; have a more prosperous nation that can create jobs and one in which Zimbabweans can return to knowing full well that it can create a lot more prosperity as in the past.

WR: What do you think about the state of Zimbabwe’s economy at the present moment?

AA: Well, Zimbabwe’s economy is very resilient.

It has done very well after Covid-19.

It grew 6,7 percent in 2021 and in 2022, it grew 3,8 percent and this year, it will probably be around 2,8 and 3,2 percent.

So, the economy is quite resilient and doing very well.

I think a lot of positive things have been done by the Ministry of Finance (and Economic Development) in terms of managing the fiscal deficit.

So, the level of fiscal deficit is quite reasonable, it is about 2 percent right now, which is very good.

The economy has also been able to attract quite a lot of positive indicators, for example, in agriculture, the country is now self-sufficient in wheat.

There is also a lot of investment coming into the mining and tourism sectors.

So, Zimbabwe is coming back, but it needs to have more resources to be fully back and that is why we are doing what we are doing.

I think one area that always concerns people about Zimbabwe’s economy is the issue of perception; whether investors should go there or whether there is rule of law and things like that.

That is why the Government is doing the governance reforms and also the economic reforms.

All the right things are being done and there is a lot of good commitment towards that.

If you can have that done and also a free and fair election, which is very fundamental, I think we will be there.

WR: So far, how much ground has Zimbabwe covered in terms of servicing its debts and arrears?

AA: It is difficult to service a debt when you are under sanctions.

So, the key is to make sure that we get the sanctions lifted because sanctions affect how the country is viewed internationally.

They affect the country’s risk profile; they affect people who want to put their money into the country because they do not know whether they will be able to take their money out.

Sanctions affect whether they can get access to finance and resources at concessional rates from international financing institutions.

So, the critical thing is to have the sanctions removed and that is why we are doing everything we are doing to make sure that is the case.

As I said earlier, Zimbabwe is such a beautiful country, we just want it to be back.

WR: What does your role as Zimbabwe’s debt champion entail?

AA: Firstly, when I accepted this role from President Mnangagwa, I was honoured to have been asked to play this role and I accepted it for three main reasons.

First, as president of AfDB, Zimbabwe continues to be a very important shareholder for us and despite all the challenges Zimbabwe faces, it continues to meet its debt obligations to the AfDB with its token payments.

Zimbabwe continues to pay for the general capture increase payments for the bank, they have never defaulted once.

We have 81 shareholder countries and 54 countries in Africa and I want Zimbabwe fully back because it is good for Zimbabwe and it is also good for Sadc (Southern African Development Community) and it is good for the world.

The second reason I accepted this role is basically that I am an African.

Zimbabwe is Africa’s jewel that has just gone through so much pain over time.

The third reason is that the future of Zimbabwe is about its young people and they deserve a better, more prosperous country.

So, those are the reasons I decided that I need to play this role to help Zimbabwe.  As a champion, you are like a vuvuzela.

You are there to say here are the things that are working, here are the things that are not working, here are the things we need to fix.

So, I am an honest broker for all sides and there to make sure that the things that need to be said are said and understood, and that the things that need to be changed are changed.

Also, as a champion and president of AfDB, I hold a very important role that enables me to discuss with the International Monetary Fund (IMF) managing director, the president of the World Bank, with the presidents of the other multilateral financial institutions that are involved in how we can get to an arrears clearance framework and a debt resolution framework.

Also, in my role, I work with the facilitator. I am delighted former president (Joaquim) Chissano has agreed to be the facilitator of the process.

So, we have to combine my role and his role to make sure that when there are some political issues that I cannot get into, former president Chissano comes in to address those issues.

He is a revered African leader.

It is a collective effort, I am champion for all, working for all, to make sure we have success.

The only thing that counts is success, and failure is not an option.

Twitter: RuzvidzoWallace