World Bank says Zim not eligible for financial support

By Staff Writer

THE World Bank says Zimbabwe is not yet eligible to receive financial support due to its huge debt which analysts believe is worsened by arrears and penalties.

In a statement this week the WB   said the Southern Africa nation remains on the list of countries no eligible for support.

“Zimbabwe, among a few other countries, is currently in arrears to the World Bank Group and, therefore, cannot receive traditional financing through the International Development Association (IDA) or International Bank for Reconstruction and Development (IBRD). For countries not current on their debt service, support can only be provided through trust funds.

“Trust funded activities in Zimbabwe are implemented primarily through our technical assistance programs and local or international partners on the ground,” the global financier said.

However, of the US$12.7 billion total external PPG debt, principal arrears (PRA), interest arrears (IRA), and penalties (PEN) alone constitute 54.9% (US$6.98 billion). From another angle, of the combined bilateral and multilateral debt amounting to US$9.1 billion, about 76% (US$7 billion) are PRA, IRA, and PEN.

Experts believe that due due to these high debt arrears, access to concessionary loan finance has been blocked. As such, predatory creditors are taking advantage of Zimbabwe’s debt crisis by fueling debt expansion – mortgaging natural resources and mineral revenues.

The records shows that debt stock is driven by government debt guarantees, particularly in agriculture. For example, as of the end of September 2023, non-performing guarantees (NPGs) totalled US$198.01 million and ZWL3.1 trillion.

About 98.4% of these NPGs supported farmers, with some loans having recovery rates as low as 20