High optimism as debt clearance dialogue progresses
Zimbabwe moved closer to resolving its debt clearance last week after hosting the third debt and arrears clearance structured dialogue with development partners and creditors amid revelations white former commercial farmers will soon hold a referendum to support the new payment arrangement tabled by the Government.
Dr Luisa Diogo, the former Prime Minister of Mozambique facilitated the meeting held on Wednesday.
Diogo is the lead technical advisor to Joaquim Chissano, the former President of the Republic of Mozambique and high-level facilitator of the process.
In 2022, President Mnangagwa appointed African Development Bank President Dr Akinwumi Adesina as champion of the country’s arrears clearance and debt resolution process.
Finance and Economic Development Minister Professor Mthuli Ncube, led a team of senior officials in this third engagement with development partners and creditors, one of which is the African Development Bank, which is facilitating the overall dialogue.
Thursday’s technical meeting - which took place at Manna Resorts in Harare - followed two similar meetings held in Harare in December and February.
The meeting brought together three sector working groups: two that had earlier been established - one on macroeconomic growth and stability reforms, and another on governance reforms - as well as a third new sector working group on land tenure reforms, compensation of former farm owners and the resolution of Bilateral Investment Promotion and Protection Agreements ( BIPPAs).
Welcoming delegates, Secretary for Finance and Economic Development, George Guvamatanga, reaffirmed the Government’s commitment to the arrears clearance and debt resolution process.
He also said the Government was committed to delivering on the policy reforms arising from the three reform matrices of the three sector working groups.
Emphasising the resolve of all partners to support Zimbabwe in working through its debt issues, Diogo said: “We are not here to talk about Zimbabwe, but rather with Zimbabwe.”
Capturing progress, Andrew Bvumbe, head of the Zimbabwe Public Debt Management Office, said there was genuine interest and commitment on all sides.
“We are together in this endeavour, and I think we can all agree that we have something to celebrate,” he said.
Development partners expressed overall satisfaction with the process. They acknowledged the swiftness with which the sector working group on land tenure, the Global Compensation Deed and the resolution of the Bilateral Investment Promotion and Protection Agreements ( BIPPAs) was established.
The meeting brought clarity to the reform agenda of the three sector working groups. Participants agreed that an International Monetary Fund
was a key component of the economic reform sector working group.
Mthuli told participants that realistically, this staff monitored programme would be implemented after Zimbabwe’s elections, expected later this year.
He told the meeting—as did World Bank country manager, Majorie Mpundu, representing the economic reforms sector working group—that a funded staff monitoring programme was necessary to ensure effective implementation of the programme and reforms.
The Government has identified five priority areas that would require funding, namely education, social protection, health, agriculture, and climate change.
African Development Bank Country Manager for Zimbabwe, Moono Mupotola, said it was possible that the Zimbabwe Fund for Development could serve as a potential vehicle in support of the social sector.
“The African Development Bank is proposing to lead the process to map out the social sector development needs based on the implementation of an IMF staff monitored programme,” Mupotola said.
She added: “The objective would be to understand where current social investments are being made and where the gaps are.”
Mupotola proposed the setting up of a working group to pursue this initiative. She said the African Development Bank would count on input from all development partners, and the team would then develop a concept note on the purpose and structure of a new Zimbabwe Fund for Development.
Mthuli said the Government would willingly embrace this as an option along with existing resources to fund such a programme. He said the Government would continue to work closely with the African Development Bank.
The meeting also brought clarity on governance reforms, articulating the critical role of the Zimbabwean constitution and the six pillars contained in Zimbabwe’s National Development Strategy 1 covering the 2021- 2025 period.
In response to the indicators for the governance reforms matrix, participants agreed on the indicators in three areas—justice delivery, electoral reforms, and peace and security.
They reached consensus on the need to streamline the governance indicators and to focus on concrete, achievable, and deliverable sub-indicators. They also resolved to work towards rationalising sub-indicators and dwell on scores rather than on indices themselves. Development partners committed to consult their capitals to conclude on this critical issue.
The sector working groups are made up of joint teams from both the Government and various development partners, including international organisations.
Commenting on progress with the sector working group on land tenure reforms, compensation of former farm owners and the resolution of BIPPAs, Anna Tinarwo, chief director in the Office of the President and Cabinet, highlighted the group’s three priorities, namely, the transferability and bankability of 99-year leases; implementing the global compensation deed; and producing a comprehensive data base of farms covered by BIPPAs to enable swift resolution.
Tinarwo spoke of the vital need to build confidence in the transferability and bankability of tenure systems and to enhance the commercial value of land. She said the 99-year leases must be reconsidered so that they are bankable and transferable, thus making them commercially viable. She added that this would enable farmers to raise capital in the markets and move away from depending on government support.
Mthuli also informed the meeting that the Government had presented a payment plan to former farm owners based on the Global Compensation Deed. He said it was awaiting their response through a referendum. He explained that the government would fast-track the resolution of BIPPAs and engage ambassadors of the affected countries.
The next structured dialogue platform meeting will take place in Harare in late April or early May and will be followed by a high-level debt resolution forum meeting on May 11.