In boardrooms all over the country executives are gathering to take stock of the year that has been. It’s been a difficult one for many with the familiar challenges no liquidity, expensive money and shrinking revenues. But there has been some good news.
This year saw the strongest indication yet that international creditors could let the country back in after more than a decade in the cold. A 10 billion dollar debt has precluded Zimbabwe from accessing fresh funding but the IMF said in September that the country could get financial support as early as the new-year if it stays on course with repayments on its arrears and implementation of reforms.
“I think its heartening to read from the IMF that they are happy with the implementation of the staff monitored programme because then it allows us to move towards the next step which is looking at if Zimbabwe can now be afforded debt relief to relieve us of this albatross around our necks” Godfrey Kanyenze,
Economic analyst
Zimbabwe reaped the dividends soon after with other lenders taking a their cue from the IMF’s vote of confidence. The AfDB agreed to write off 601 million in arrears. In October international creditors approved the country’s debt resolution plan.
Agriculture is the mainstay of the local economy, yet it slumped to minus 8.2 percent growth in 2015. With projections of another poor rainfall season prospects for 2016 are bleak, but plans to solve the perennial problem received a boost after the International Fund for Agriculture (IFAD), became the latest international financier to warm up to Zimbabwe.
“We are a drought prone country we give priority to irrigation in particular small holder irrigation and we would want in accommodation with IFAD so that we can unlock new value.” Patrick Chinamasa, Finance Minister
Zimbabwe owes IFAD $40 million but recently won support for its plans to reschedule the debt. 2015 also saw the activation of multi-billion dollar co-operation agreements with China. The China Exim Bank will extend loans for expansion of Zimbabwe’s biggest thermal power station. China will also fund four more power plant and a host of other capital projects.
Infrastructure is seen as a key enabler to get the economy back on track. Zimbabwe has struggled to fund capital projects because more than 85 percent of its budget is used on recurrent expenditure.
Reversing the trend should take centre stage in 2016.
“Productivity should be more pronounced than consumption. Social services must be balanced by production. So we need to look at how best we can be able to plan for production in this country.” Oswell Binha, President,Southern African Business Council
2015 has been about winning over international development partners. The success has left local businesses, that have stood resilient throughout the challenges, more confident of a brighter 2016 to look forward to.
