Harare,
Zimbabwe
–
December
22
2018:
Aerial
panoramic
daytime
view
of
Harare
city
centre.
Image
used
for
illustrative
purpose.
Getty
Images
Getty
Images
The
African
Development
Bank
(AfDB)
says
a
new
law
introduced
by
Zimbabwe
to
curb
civil
society
activities
is
a
major
setback
to
the
southern
African
country’s
push
for
urgent
debt
relief.
Zimbabwe
owes
foreign
creditors
$21
billion,
with
arrears
making
up
a
significant
portion
of
the
debt
overhang
and
preventing
the
country
from
accessing
low-cost
loans
from
institutions
like
the
World
Bank
and
AfDB.
The
country’s
debilitating
debt
crisis
took
centre
stage
at
a
major
event
on
the
sidelines
of
the
International
Monetary
Fund
(IMF)
and
World
Bank
Spring
Meetings
in
Washington
this
week.
AfDB
president
Akinwumi
Adesina
told
the
roundtable
on
Zimbabwe’s
Arrears
Clearance
and
Debt
Resolution
Process
that
the
recently
passed
Private
Voluntary
Organisations
(PVO)
Act
posed
a
threat
to
the
debt
resolution
talks.“Zimbabwe
has
made
a
lot
of
progress,
against
all
odds,”
said
Dr
Adesina,
before
pointing
that
that
the
PVO
law
was
“a
significant
setback
and
poses
a
risk
to
the
arrears
clearance
and
debt
resolution
process.”After
the
controversial
bill
was
signed
into
law
by
President
Emmerson
Mnangagwa
on
April
11,
the
European
Union
(EU)
immediately
suspended
its
financial
support
for
governance
reforms
that
creditors
had
set
as
one
of
the
key
conditions
for
talks.
The
EU
said
it
was
disappointed
that
Zimbabwe
had
failed
to
live
up
to
its
own
commitments
in
the
process,
particularly
on
expanding
civic
space.
President
Mnangagwa
ignored
advice
from
United
Nations
experts
and
local
civil
society
groups
to
sign
the
new
law
that
amended
five
major
pieces
of
legislation
and
triggered
sweeping
changes
to
Zimbabwe’s
regulatory
framework
for
civic
groups
and
NGOs.
It
gives
the
authorities
extensive
powers
to
monitor
and
control
the
operations
of
voluntary
organisations,
including
the
ability
to
scrutinise
their
ownership
structures,
funding
sources
and
affiliations.
Talks
progress
Former
Mozambican
President
Joachim
Chissano,
who
is
facilitating
the
debt
relief
talks,
said
Zimbabwe
needed
to
pay
attention
to
civil
society
engagement,
democratic
elections,
judicial
processes,
freedom
of
assembly
and
freedom
of
expression
as
part
of
the
reforms
needed
for
the
debt
talks
to
yield
results.“These
challenges
show
that
dialogue
is
still
needed
for
reforms
to
take
root.“They
also
show
that
political
reforms
are
not
a
linear
process,”
Mr
Chissano
said,
adding
that
these
challenges
“should
mobilise
us
to
redouble
our
efforts
and
re-energise
the
dialogue
process.”He,
however,
expressed
optimism
that
the
debt
relief
talks
would
bear
fruit
as
he
felt
that
the
country
had
made
some
progress
on
the
required
reforms.“The
parameters
of
the
dialogue
have
been
set,”
Mr
Chissano
said.
“Most
issues
have
been
dealt
with.
Commitments
and
targets
have
been
agreed
upon.“We
should
all
be
proud
of
the
dialogue
process
and
what
it
has
achieved.”Zimbabwe
was
pushing
for
a
$2.6
billion
bridging
loan
to
clear
its
arrears
with
international
creditors
as
part
of
the
debt
relief
talks.“The
government
of
Zimbabwe
has
proposed
a
plan
to
secure
bridge
financing
of
$2.6
billion
to
clear
arrears
to
international
financial
institutions,”
the
AfDB
said
after
the
roundtable
in
Washington.
The
temporary
loan
would
help
Zimbabwe
to
pay
off
its
overdue
debts
to
international
lenders,
which
could
pave
the
way
for
the
country
to
be
allowed
to
access
cheaper
loans
from
global
financial
institutions.
Arrears
clearance
Dr
Adesina
said
other
crucial
steps
included
exploration
of
additional
resources
from
the
African
Development
Fund
and
prioritisation
of
Zimbabwe’s
arrears
clearance
within
the
G20
Common
Framework.
He
said
the
AfDB
was
mobilising
resources
for
the
country’s
arrears
clearance,
which
could
materialise
towards
the
end
of
this
year.“Similarly,
we
encourage
the
World
Bank’s
International
Development
Association
to
do
the
same
to
clear
arrears,”
Dr
Adesina
said.“To
move
the
arrears
clearance
and
debt
resolution
forward,
the
African
Development
Bank
Group
is
financing
the
global
sovereign
advisory
and
legal
advisors,
Kepler-Karst,
to
support
the
arrears
clearance
and
debt
resolution
process
with
clear
timelines.”Mr
Chissano
said
Zimbabwe
had
undertaken
to
introduce
reforms
that
will
see
its
central
bank
ceasing
quasi-fiscal
operations,
relaxing
exchange
rate
controls
and
making
token
payments
to
creditors.
He
said
the
payment
of
compensation
to
more
than
4,000
white
Zimbabweans
who
were
dispossessed
of
their
farms
during
a
chaotic
land
reform
two
decades
ago
was
also
part
of
the
process
that
needed
be
prioritised.
The
IMF
programme
falls
under
the
economic
reforms
Zimbabwe
is
undertaking
as
part
of
the
process
to
clear
its
$21
billion
public
debt
and
arrears.
The
EU,
along
with
the
United
States,
has
been
one
of
the
biggest
financiers
of
the
process.
The
US
pulled
out
of
the
process
last
year
following
President
Mnangagwa’s
controversial
re-election
and
demanded
both
economic
and
political
reforms
as
part
of
its
conditions
for
returning
to
the
table.
The
country’s
biggest
Paris
Club
creditors
are
Germany,
France,
the
United
Kingdom,
Japan
and
the
US
with
a
combined
external
debt
stock
of
$2.9
billion,
representing
74
percent
of
the
total
Paris
Club
external
debt.
Zimbabwe’s
debt
stock
has
risen
in
recent
years
as
the
country
has
sought
cheap
loans
from
China
for
infrastructure
but
has
been
unable
to
repay
the
money
due
to
an
unending
economic
crisis
characterised
by
hyperinflation
and
currency
instability.
Source:
Why
AfDB
warns
Zimbabwe’s
new
law
stands
in
way
of
debt
relief?
Post
published
in:
Business