Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Zim debt now US$10,7 billion

Zim debt now US$10,7 billion

Friday, 06 July 2012 10:40

ZIMBABWE’S external debt overhang is now estimated at US$10,7 billion and, 
at 111% of GDP, has become an impediment to external sustainability, 
according to an IMF report seen by the Independent.
This debt overhang was as at end of 2011, with the equivalent of 59% of GDP 
being arrears.

The fund warned of a financing gap before any measures of around US$838 
million for the year 2012, a development it said needed an urgent policy 
response. This is because projections of a balanced budget for 2012 made by 
Finance minister Tendai Biti last year are now in doubt due to revenue 
shortfalls and expenditure overruns.

The IMF projected a total revenue shortfall of US$640 million as total 
revenue collection in the first five months of 2012 was US$200 million lower 
than anticipated, mainly due to low diamond dividends.

The report was compiled by an IMF team headed by Alfredo Cuevas and 
comprising Murna Morgan, Christian Henn, Eliza Lis and Futoshi Narita, which 
visited Harare from June 13-27 to conduct routine Article IV consultations 
with the country’s authorities.

The fund strongly cautioned against government’s collateralisation of 
mineral revenues to access more debt.

Meanwhile TN Holdings’ shareholders have approved the demerger of TN Bank 
from the holdings company, which will see telecoms company Econet get a 45% 
stake in the bank. All shareholders voted for the resolution, which comes at 
a US$20 million cost to Econet. Chief executive Tawanda Nyambirai said the 
bank will take advantage of Econet’s strength and stability with products 
such as Ecocash expected to be key drivers of growth going forward. — Staff 


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