Bloomberg News

Zimbabwe’s Biti Says Election Deadlock Stalls Plan to Clear Debt

June 08, 2011

June 8 (Bloomberg) -- Zimbabwe’s efforts to clear its international debt arrears are being hampered by a deadlock over the staging of elections, Finance Minister Tendai Biti said.

The government approved a plan in November to pay arrears of about $1.3 billion to the International Monetary Fund, the African Development Bank and the World Bank. The move would open the way for the southern African nation to reschedule other debts and raise new loans needed to rebuild the economy, which is recovering after a decade of recession.

“Our plan to deal with the question of debt” is behind schedule, Biti said in an interview at an AfDB meeting in Lisbon today. “A lot of friends that have to come on board if we are to succeed are worried about recent political developments.”

The Movement for Democratic Change, of which Biti is secretary-general, formed a unity government with President Robert Mugabe two years ago after presidential elections were aborted because of violence. While the coalition helped end the recession, the parties remain at odds about writing a new constitution and holding elections.

Mugabe has been pushing for the vote to be held this year, while the MDC and regional mediators say constitutional changes and election rules need to be agreed upon first.

A new Zimbabwean law, which gave foreign mining companies until June 2 to show how they will sell 51 percent of their shares to black Zimbabweans or state companies, has also concerned the country’s international partners, Biti said.

Growth Forecasts

He maintained his November forecast that the economy will expand 9.3 percent this year, up from about 8.1 percent last year.

The estimates are more optimistic than those contained in the 2011 Africa Economic Outlook, which projected growth would slow to 7.8 percent this year and to 5.4 percent in 2012. The outlook, published on June 6, was written by the AfDB, the Organization for Economic Cooperation and Development, the United Nations Development Program and the UN Economic Commission for Africa.

“We are going to rebound strongly on the back of a strong agricultural performance,” Biti said. “My biggest fear is that the political noises that have been coming up will have a debilitating effect on the economy.”

--Editors: Philip Sanders, Andrew Atkinson

To contact the reporters on this story: {Mike Cohen} in Lisbon at mcohen21@bloomberg.net.

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net.


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