He says this would be 118 percent of the country’s Gross Domestic Product (GDP) by the end of 2012.
“The full extent of Zimbabwe’s external indebtedness and the effect of capitalisation of interest due to arrears accumulation, therefore, need to be quantified,” Biti said in Harare.
“Technical assistance from the United Nations Committee on Trade And Development (UNCTAD) and other development partners will be necessary.”
Top of the list of the debt are struggling and broke parastatals which continued to milk millions from the cash-strapped government’s fiscus which is dwindling monthly.
They include Air Zimbabwe Holdings (Private) Limited, the cash-strapped Zimbabwe Electricity Supply Authority (Zesa), National Oil Company of Zimbabwe (Private) Limited Suppliers Credits, as well as the Reserve Bank of Zimbabwe (RBZ), currently under Dr Gideon Gono.
Air Zimbabwe owes a grand total of US$70 million, Noczim (US$75 million), Zesa Suppliers Credits (US$101 million), while the RBZ owes a staggering US$1,3 billion of the total amount.
“Penalties and arrears to creditors continue to accumulate, with the external debt position projected to grow to over US$8 billion (118 percent of GDP) by end 2012,” Minister Biti said.
He said his ministry had established the Zimbabwe Aid and Debt Management Office (ZADMO) to assume responsibility over debt management which would represent strengthening of debt management in Zimbabwe.
“This is in light of the importance of prudent debt management to the country’s sustained economic development, both now, and post the resolution of Zimbabwe’s debt challenges,” Biti said in Harare.
As at the end of December 2010, Zimbabwe’s invalidated external debt position was estimated at US$6,9 billion of which almost US$4,8 billion was accumulated arrears.
Biti said this was about 103 percent of GDP and about 72 percent of GDP, respectively, which is “very worrying”.
He said Zimbabwe might have to “leverage the country’s natural resources in persuit of economic development”.
This, economists warn, could mean leveraging the country’s diamonds expected to “conservatively” chalk up more than US$600 million for the fiscus annually.