Central bank Governor John Mangudya says Zimbabwe’s plan to settle arrears to multilateral lenders is facing resistance from within the government, a development he said was akin to “shutting ourselves in a hole.”
His remarks are the latest indication of the growing discord in President Robert Mugabe’s government, coming after Information Minister Chris Mushowe on Wednesday issued a statement repudiating Finance Minister Patrick Chinamasa’s proposals, made six days earlier, to cut public sector jobs and bonuses which he said were essential to rein in spending and a ballooning budget deficit.
Zimbabwe owes $1.8 billion to the World Bank, International Monetary Fund and the African Development Bank who are insisting on full repayment before discussing a new financial package, the first since 1999.
Presenting his Monetary Policy statement yesterday, Mangudya, who chairs the external arrears clearance and re-engagement process, said he was concerned that “there are some people in this economy who do not want us to pay these arrears”.
“Sometimes I find it a bit difficult that we are being pulled backwards, not by the IMF, World Bank and AfDB, but by Zimbabweans. If it is being smart, colleagues l beg to differ. We are closing ourselves in a hole. We need to be very careful about the clearance of arrears. We are not doing it for Mangudya or for the government. It is being done for the people of Zimbabwe,” said Mangudya.
“Let us put our heads together, this economy is ours together. We all belong here, if the economy is burning we all burn together. It is suicidal not to pay the arrears because they will continue to accumulate therefore we are not being clever by doing so.”
Chinamasa presented the settlement plan to the three lenders in Lima, Peru, last October as part of a process to reset relations with the international lending community. The plan was endorsed by the boards of all the three lenders, who accepted Zimbabwe’s a self-imposed deadline of July, 2016.- The Source