Clearance of arrears with International Finance Organisations to reform the economy

By Dean Jombo

The decision by the government to start talks on clearing arrears with International Finance Organisations will help to reform the economy.

In an interview Economic Analyst Dr Davison Gomo said the decision by the government to begin talks with the World Bank and the International Monetary Fund will help the country to clear its debts.

‘Loans need to be serviced from time to time because if they are not they create challenges in dealing with other major financial institutions’ he said.

Dr Gomo also said that the decision to start talks on clearing arrears is a welcome move for the country as the negotiations will lead to the creation of flexible international trade and financial arrangements.

‘The negotiations will create a space for the government to make flexible international trade and financial arrangements and this will benefit  the country to a greater extent as the talks will achieve economic objectives of the country ’. said Dr Gomo.

The Analyst added that the decision by the government to begin talks was a step in the right direction as the negotiations will bolster the country’s ability to achieve its long term economic objectives.

Dr Gomo’s comments follow a statement by the Finance and Economic Development Minister Professor Mthuli Ncube that the government would begin talks with various multi lateral lenders aimed at clearing the country’s loans and repayment arrears to allow the government to secure new funds to help the country out of its economic down turn.

According to the government’s Transitional Stabilisation Programme (TSP), the country external debt stands at USD 5.6 billion. The talks with various global financiers will assist Zimbabwe to clear this debt and be able to acquire fresh loans which will be directed towards economic recovery.