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Harare -
Zimbabwe is considering mortgaging its mineral wealth to offset
the country's $5.4bn debt owed to multilateral donor
agencies, a government report says.
The ministry of finance report seen by AFP said various options
were being considered for paying off the external debt, an
essential step to secure new financing from lenders for 2010-2012.
"A key conditionality for unlocking new financing of 7.5 billion
- 10 billion (dollars) ... evolves around the development of a
Debt Relief and Arreas Clearance Strategy for the country's
external debt overhang of 5.4 billion, of which 3.8 billion is in
arrears," the report said.
Also under consideration was using internal revenue resources,
asking for debt restructuring from the Paris Club of lender nations
or "going through the Highly Indebted Poor Country (HIPC) route for
debt forgiveness," the report added.
Government, in co-operation with major creditors will undertake
in-depth studies on the various options to come up with a
"sustainable debt management and clearance solution which balances
the interests of the country and its creditors," it added.
Zimbabwe has vast mineral resources, but the sector has been set
back by a near decade of political and economic instability
worsened by a hyperinflation, and power cuts.
According to Finance Minister Tendai Biti the country will need
$45bn to restore its economic performance to levels
seen in 1996/7.
Zimbabwe's economy has contracted every year since then, but is
expected to grow 4.7 percent this year after the local currency was
abandoned in January and a unity government took office the
following month.
President Robert Mugabe, who has ruled since independence in
1980, was forced into the power-sharing arrangement with Prime
Minister Morgan Tsvangirai following disputed elections last year.
The deal, known as the Global Political Agreement (GPA), remains
shaky due to a raft of disputes over key jobs and claims that
Tsvangirai's supporters remain the target of official persecution.
- Sapa-AFP