Government believes using commercial loans for debt cancellation will not save the country from debt, but was rather looking at accessing soft loans or grants to speed the clearance process in order to access fresh capital from multilateral institutions.
Standing in for Finance and Economic Development Minister Mthuli Ncube at the Zimbabwe High Level Debt Conference in the capital yesterday, Martha Mugweni from Zimbabwe Aid and Debt Management Office said the country might consider going the grants way for debt clearance than commercial loans.
“Indications are that if we use commercial loans to clear our arrears the problem we are having will never end, we need either a very soft loan or a grant, but I don’t know if we will be able to convince any country to give us a grant considering our current state.
“That would be the best option, but we are saying failure to that maybe if the G7 can give us a soft loan that has IDA terms, which means it will have zero interest with only service fee of 0,75 percent which we can use,” she said.
According to official statistics the country’s total debt stands at $16,6 billion as at December 31 2018 with an external debt now at US$8,16 billion which is 33,2 percent of the GDP.