Government says it has made repayments amounting to US$180 million to Chinese creditors during the first half of the year as part of efforts to improve the country’s creditworthiness and strengthen bilateral ties with China.
The Zimbabwean government says it has prioritised the debt resolution and re-engagement with regional as well as international financial institutions as a way of enhancing the country’s creditworthiness.
Finance and Economic Development Minister, Patrick Chinamasa, who had a chance to unpack the bilateral investment deals concluded in China to the local business community, said the country seeks to create long lasting business relations with the Asian country, adding that token payments are currently being made to Chinese creditors.
“In six months we have paid a total of US$180 million so that we look good to Sinosure (a Chinese insurance company whose mandate is to guarantee loans from Chinese banks). This is in relation to loans which were guaranteed by government,” said Cde Chinamasa.
Chinamasa stressed that, contrary to some sections of the local business community expectations, there will not be budgetary support from China, but rather financial support towards key infrastructural projects.
Policy makers and captains of industry who graced the Sino-Zim bilateral deals breakfast meeting stressed the need for monitoring and evaluation in the implementation of the investment deals signed between the country and the people’s republic of China.
The Finance Minister is set to present the debt resolution strategy paper in cabinet soon as the country seeks to deal with the issue of the huge debt overhang which has been cited as one of the major threats to increased capital inflows.
The repayments of the Chinese loans is expected to ensure the country is in good standing with Sinosure, a Chinese insurance company whose mandate is to guarantee loans from Chinese banks.
Meanwhile Chinamasa says the 2014 mid term policy statement to be presented on Thursday will seek to consolidate the confidence boosting measures announced in the recently presented monetary policy statement.
The mid term policy statement is set to outline how the economy performed during the first half of the year while new or revised measures to stimulate the economy will be pronounced.
Chinamasa told captains of industry who graced the Sino-Zim bilateral deal breakfast meeting that the mid-term budget will consolidate on the measures announced in the 2014 monetary policy and also focus on the demonetisation of the Zimbabwe dollar.
“There is no need to worry on the fact that the monetary policy came first than the fiscal policy. I can assure you that we work as a team and Thursday’s budget will seek to build on the measures presented in the monetary policy statement,” said Cde Chinamasa.
Chinamasa stressed that the 2014 national budget was policy-oriented and sought to create an enabling environment for economic take off and the restoration of investor confidence.
The Minister is also expected to revise downwards economic targets following subdued performance of the economy during the first six months of the year.
Due to limited fiscal space, government was forced to deal with the re-current expenses at the expense of capital projects.
The mid term budget review will be present at the backdrop of depressed foreign direct investment inflows, huge debt overhang and revenue under-performance.