Lima deal is work in progress — Mangudya

THE Lima Agreement, which is designed to liquidate the country’s arrears with both multilateral and bilateral creditors, is still in the works, the central bank has said.

Government is presently engaging the World Bank and the African Development Bank (AfDB) after paying more than US$100 million owed to the International Monetary Fund (IMF).

The Lima deal was thrashed in October 2015. It is largely expected to unlock fresh capital from international financiers.

The country’s external dent presently stands at US$8 billion, with the World Bank accounting for 57 percent.

As at September 2016, Zimbabwe’s arrears with the World Bank Group was US$1,1 billion, while US$601 million was owed to the AfDB.

Last week, Reserve Bank of Zimbabwe Governor Dr Mangudya told The Sunday Mail Business that: “The Lima Agreement is work in progress.

“We know that we have finished with the IMF and we are now left with dealing with the World Bank and the AfDB, and it’s in progress . . . The timelines, as you know, are determined mainly by the lenders. It’s not in our line; it’s not our sphere to influence the time, the time comes from the lenders who are owed money,” he said.

The country was expected to have paid off its arrears to international financiers last year.

There were plans to use the bridge loan facility that has been arranged by the debt advisers, African Export-Import Bank (Afreximbank), to clear the outstanding arrears to AfDB of US$585 million and ADF of US$16 million by December 31, 2015.

The bridge loan was supposed to be repaid using inflows from the Pillar II of AfDB.

Dr Mangudya indicated Government is “paying everyone” without discrimination.

“Zimbabwe owes many people money and we owe it to pay everyone; there is no favouritism. If you borrow money from the World Bank, you need to pay the World Bank, if you borrow from China, you have to pay Chinese, if you borrow from Malaysians, you need to pay Malaysians; so we are paying everyone according to availability of resources,” he said.

It is believed that payments will continue to be made to the World Bank and AfDB until the arrears are cleared.