Zimbabwe Misses Own Deadline to Repay $1.8 Billion; Pays None

Harare, Capital Markets in Africa, Zimbabwe failed to repay $1.8 billion to the International Monetary Fund, the World Bank and African Development Bank by its own June 30 deadline.

“Right now, we’ve not paid anything,” John Mangudya, Zimbabwe’s central bank governor, said by phone from the capital, Harare, on Thursday. “That is why we have this re-engagement process with international financial institutions. This is all part of re-engagement and confidence building measures.”

Finance Minister Patrick Chinamasa said earlier the country would repay at least $1.8 billion by the end of June to be able to resume borrowing. Zimbabwe owes $110 million to the IMF, $1.1 billion to the World Bank and $601 million to the African Development Bank, Mangudya said in an e-mailed response to questions on Thursday.

The IMF will only consider requests for financing once Zimbabwe clears arrears its with the lender and the IMF board approves the normalization of relations with the country, spokesman Gerry Rice told reporters on Thursday in Washington.

The southern African nation is experiencing an unprecedented liquidity crisis that’s led to civil servants being late and some private-sector workers receiving goods instead of salaries. The led to a national strike on July 6. The country was also hit by riots as taxi operators protested against what they said was police harassment and Zimbabwe’s main border post with South Africa was shut for a weekend after the government banned the import of certain goods, sparking demonstrations from traders.

Most banks have limited cash withdrawals to $100 a day, leading to snaking queues at automated teller machines countrywide. Zimbabwe’s foreign direct investment fell 23 percent to $421 million in 2015, according to a report in the Financial Gazette newspaper that cited United Nations data.

Source: Bloomberg Business News