Thread by @OpenParlyZw

HAVE YOU CONSIDERED THE HIPC ROUTE?

HON. MASHAKADA: Thank you very much. I just want to follow up with the Minister on question of debt repayment. I want to know whether the Minister is following the Lima Process or he has revised it & come up with a new debt repayment approach

HON MASHAKDA: Following that, I would also want to hear your views, whether you have considered the HIPC route to lessen the debt to the country. Thank you.

@MthuliNcube : I want to thank the Member for the question. We have adjusted the Lima Process for the following reasons.

@MthuliNcube : First of all the Lima Process involved specific country and I do not know whether I am allowed to mention it because I do not know whether that country’s involvement was official or not back then.

@MthuliNcube : There was a country which had large amount of resources that was willing to assist us in the bridge financing for the shortfall of the African Development Bank and the World Bank arrears.

@MthuliNcube : That country then fell by the wayside for various reasons, so we have adjusted in the sense that we are speaking to other potential sources of funding that can assist with that bridge funding including specific financial institutions in the commercial sector.

@MthuliNcube : Also, I said we are adjusting the Lima Process, we are also still looking at the issue of talking to the creditors as well in the first place.

@MthuliNcube : The trouble of going the route of commercial source for bridge loan is that it blocks the second stage of the debt resolution process which is the Paris Club negotiations because all creditors do not have to rank pari passu,

@MthuliNcube : and even the commercial lenders have to take a haircut under the Paris Club and they were never willing to do that. So it gives challenges in the second phase, so sometimes it is better to try to go through the route of the Paris Club Creditors in the first place

@MthuliNcube : So we have kept that channel also opened. The Hon. Member also asked about whether we are following the epic route or not.

@MthuliNcube : We have looked into it & response that we have received so far is you as Zimbos are not exactly a low income country because this route is available to those that are officially designated as low income countries in terms of the Gross National Income per capita.

@MthuliNcube : As you are classified as lower middle income country – that has been expressed. We believe that route maybe closed but we have to keep trying to make sure that we find right path to resolving our arrears clearance and to keep our debt in check.