Zimbabwe: Zim set to clear AfDB multi million dollar arrears

Reserve Bank of Zimbabwe Governor Dr Gideon Gono has said the southern African country is set to clear $510 million it owes African Development Bank (AfDB).

The funds would sourced through the Fragile States Facility.

“Under this facility, Zimbabwe would be required to meet up to one-third of its arrears clearance obligations, while the remaining two-thirds of the required financing would be provided through the FSF.

“Zimbabwe is already on course towards fulfilling the preconditions for accessing financing under the FSF,” said Gono.

The FSF was set up as an operationally autonomous special purpose entity within the AfDB to provide eligible fragile states with clearance of arrears for eligible countries.

The facility also provides technical assistance and capacity building support in an effort to contribute to accelerated state building and supplemental grant resources to support post-conflict states in their rehabilitation and reconstruction efforts.

The key preconditions for accessing FSF funds include commitment to consolidating peace and security, a demonstration of the unmet social and economic needs, a track record of sound macro-economic and financial management reforms, respect of the preferred credit status of the AfDB group and eligibility for traditional debt relief.

The use of the AfDB’s FSF is one of the mechanics of the ZAADDS through which the country plans to re-engage with its respective multilateral, bilateral and commercial creditors.

Zimbabwe owes multilateral institutions about $2,504 billion, of which the World Bank is owed $1,126 billion, the IMF, $550 million, the African Development Bank (AfDB) $529 million, and the European Investment Bank (EIB), $221 million.

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