STANDARD Chartered Plc has confirmed being part of a proposed debt resolution plan for Zimbabwe, but says it will only provide the funding after reforms and with the approval of the British government.
Media reports last week said the British bank was considering putting up US$262 million towards clearing Harare’s US$600 million with the African Development Bank (AfDB).
In October 2015, Zimbabwe agreed on a plan to clear its $1.8 billion arrears with the World Bank ($1.1 billion), the AfDB and the IMF, whose US$110 million was paid last month.
President Robert Mugabe’s government hopes to clear arrears and open up access to fresh funding for Zimbabwe’s cash-starved economy. Without resolving its external arrears problem, Zimbabwe continues to carry a considerable risk premium, which dissuades potential lenders to both the government and private sector, while making the little credit lines available to the country expensive.
However, the veteran ruler’s opponents view the arrears programme, dubbed the Lima Plan after the October meeting in Peru that produced an agreement between Zimbabwe and the multilateral lenders, as a bail out for Mugabe’s government.
According to media reports, Standard Chartered and the African Export and Import Bank (Afreximbank) would make equal US$262 million payments towards Zimbabwe’s AfDB arrears. Zimbabwe would pay the balance, US$82 million.
“We were asked by regional banks to consider a financing deal,”Standard Chartered said on its official Twitter account following a string of queries.
“We wont proceed without full support of UK government and reforms.”
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