"Zimbabwe creditors see debt restructuring talks resuming despite disputed vote"

" Zimbabwe creditors see debt restructuring talks resuming despite disputed vote \r\n\r\nWestern-based creditors expect to resume talks with Zimbabwe on restructuring its $18 billion of debt, despite doubt over the credibility of last week\u2019s elections, which handed President Emmerson Mnangagwa another five-year term.\r\n\r\nZimbabwe defaulted on its loans in 1999, shutting off its access to credit lines, and its economy has been hobbled by runaway inflation and an almost worthless local currency. Mnangagwa, 80, last year tapped the African Development Bank\u2019s president, Akinwumi Adesina, and former Mozambique leader Joachim Chissano to lead talks on reorganizing the liabilities.\r\n\r\nThe European Investment Bank will participate in the discussions, said Jim Hodges, head of the lender\u2019s regional hub for southern Africa and the Indian Ocean.\r\n\r\n\u201cEIB participation in the talks aims to recover outstanding debts, and is not an endorsement of any government,\u201d he said in an emailed response to questions. \u201cSince the government of Zimbabwe is in default, the EIB is currently not pursuing the financial support of any public-sector projects in the country.\u201d\r\n\r\nZimbabwe\u2019s other external creditors include the World Bank, Paris Club, and the AfDB. The AfDB and Zimbabwe\u2019s Treasury had both warned that any debt restructuring agreement would be contingent on the elections being free and fair, but international observers found that the process was deeply flawed and the opposition rejected the outcome as a \u201csham,\u201d calling for a rerun.\r\n\r\n \r\n\r\nThe World Bank, which is owed $1.5 billion by Zimbabwe, said it had been participating in the talks for the past eight months and is providing economic advice. \u201cIt is too early to predict the outcome of this engagement,\u201d a spokesperson for the Washington-based lender said by email.\r\n\r\nZimbabwe in 2016 paid off its arrears to the International Monetary Fund, but remains ineligible to borrow from it because of its other outstanding obligations. The government has now formally asked the lender for a staff-monitored program that would help underpin its arrears clearance strategy.\r\n\r\n\u201cTechnical discussions in preparation for an SMP are expected to commence in due course,\u201d the IMF said in an emailed response to questions. It declined to comment on domestic politics in Zimbabwe or the election.\r\n\r\nThe AfDB didn\u2019t respond to a request for comment.\r\n\r\nZimbabwe\u2019s Treasury has proposed either a write-off as a highly-indebted poor country, or that its arrears be cleared using a combination of the nation\u2019s own resources and bridge financing from bilateral development partners, or concessional loans.\r\n\r\nThe government will only be able to re-access \u201cinternational credit facilities when it repays existing debt, either in full or in part, according to the proposal accepted by the creditors,\u201d Hodges said."

"Zimbabwe creditors see debt restructuring talks resuming despite disputed vote"

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