Tags: Zimbabwe | minerals | mortgage

Strapped Zimbabwe May Mortgage Minerals

Thursday, 31 December 2009 11:37 AM

HARARE — Zimbabwe is considering mortgaging its mineral wealth to offset the country's 5.4 billion dollar debt owed to multilateral donor agencies, a government report says.

The ministry of finance report seen by AFP said various options were being considered for paying off the external debt, an essential step to secure new financing from lenders for 2010-2012.

"A key conditionality for unlocking new financing of 7.5 billion -- 10 billion (dollars) ... evolves around the development of a Debt Relief and Arreas Clearance Strategy for the country's external debt overhang of 5.4 billion, of which 3.8 billion is in arrears," the report said.

Also under consideration was using internal revenue resources, asking for debt restructuring from the Paris Club of lender nations or "going through the Highly Indebted Poor Country (HIPC) route for debt forgiveness," the report added.

Government, in co-operation with major creditors will undertake in-depth studies on the various options to come up with a "sustainable debt management and clearance solution which balances the interests of the country and its creditors," it added.

Zimbabwe has vast mineral resources, but the sector has been set back by a near decade of political and economic instability worsened by a hyperinflation, and power cuts.

According to Finance Minister Tendai Biti the country will need 45 billion dollars to restore its economic performance to levels seen in 1996/7.

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Thursday, 31 December 2009 11:37 AM
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