Media Wire Express Correspondent
China has written off an unspecified amount of Zimbabwe’s interest-free loans and pledged to help the Southern African country find a way out of its debt crisis, even as activists warned of a permanent debt trap.
By September 2023, Zimbabwe’s total publicly guaranteed debt amounted to $17.7 billion, with $12.7 billion being external debt and $5 billion domestic.
The majority of the foreign debt was acquired from China, as the country is no longer eligible for loans from international financial institutions like the World Bank and the International Monetary Fund (IMF) following.
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As of September 2023, Zimbabwe’s total publicly guaranteed debt amounted to $17.7 billion, comprising $12.7 billion in external debt and $5 billion in domestic debt.
The majority of the foreign debt was acquired from China, as Zimbabwe has been unable to access loans from international organizations like the World Bank and the International Monetary Fund (IMF) due to defaults on repayments dating back to the early 2000s.
Former Mozambican President Joachim Chissano and African Development Bank President Dr. Akinwumi Adesina are spearheading the debt restructuring discussions. The dialogue faced a setback recently as the United States pulled out its support, attributing it to Harare’s resistance to reform.
“China would like to enhance communication with the Zimbabwe government to work out proper statements through friendly consultation. As a concrete measure, China has cancelled Zimbabwe’s interest-free loans, which matured by the end of 2015.”
Mr Zhou did not disclose the amount of loans written off, but observers said it may not be much, as Zimbabwe increased its Chinese debt for infrastructure projects after the end of Mr Mugabe’s nearly four-decade rule.
Zimbabwe’s founding leader was replaced by President Emmerson Mnangagwa following a military coup in 2017.
President Mnangagwa’s government has continued to borrow heavily from China, but Mr Zhou said it was not true that Zimbabwe was now in a death trap because of excessive Chinese loans.
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