Finance minister Mthuli Ncube is actively seeking to have the Zimbabwe foreign debt forgiven under the Highly Indebted Poor Countries (HIPC) programme by the International Monetary Fund (IMF), a move that would spring the ailing economy into life and ease the liquidity crunch.
Speaking on his return from Bali, Indonesia, where heads of multi-lateral institutions have been meeting, Ncube said his presentation on debt clearance and privatisation of loss-making parastatals was well-received and if rolled out, would be the panacea to the country’s economic crisis.
“The meetings in Bali and the World Bank/IMF annual meetings were very successful. The Transitional Stabilisation Programme (TSP) that I presented was well-received by all the partners as a way to revive the Zimbabwe economy. The programme hinges on a variety of issues such as arrears clearance. Again, we came up with a very strong and credible roadmap for that, which includes both HIPC and non-HIPC options for resolving Zimbabwe’s arrears situation,” Ncube told State-owned media journalists yesterday.
Zimbabwe has, in the past few years, tried to have its crippling debt cleared under the HIPC programme, but failed, with critics arguing that the country’s toxic political environment, then under former President Robert Mugabe, were to blame.
Mugabe spent the last years of his rule ranting at the West, accusing them of seeking a regime change agenda.
However, former Finance minister Tendai Biti yesterday ripped into Ncube’s reform plan, saying it was the worst economic blueprint Zimbabwe has had in a long time.
Biti, who serves as deputy national chairman of the opposition MDC Alliance and now chairperson of the Parliamentary Public Accounts Committee, accused Ncube of failing to grasp elementary economics. The former Treasury chief, however, seemed to agree with Ncube on seeking debt clearance through the HIPC programme.
“A lot has to be done, which is very technical. So one of the things we have to do is deal with debt, and we propose to deal with debt through the HIPC programme. That programme is very good because it allows your debts to be cancelled and forgiven if you behave well, if you run the economy well. So you get rewarded, but you have to be a low-income country, you have to be poor,” Biti said.
But he argued Ncube had literally shot himself in the foot by claiming Zimbabwe was a $25 billion economy.
“How do you do that? You have no research, no empirical study. Our GDP [gross domestic product] is $13 billion. He doubles it up. Are you a mad man? What are you smoking?” Biti queried.
“Suddenly, we are now a middle-income country. Our per capita income is now $1 500 to $1 700. That is why I said Ncube is a disaster. He is a time bomb that is waiting to explode. He has done more damage to this economy than (former finance minister Patrick) Chinamasa.”
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