Economic analysts say while the recent International Monetary Fundâ€™s report suggesting that debt cancellation is the only way to deal with Zimbabweâ€™s over US$6 billion external debt may seem convenient, caution must be taken especially against the negative socio-economic cost of such a move.The IMF suggested on Wednesday that Zimbabweâ€™s debt cannot be repaid by the implementation of sound economic policies or the exploitation of the mineral resources, but rather through debt relief.
Economic analyst, Mr. Innocent Makwiramiti says while Zimbabwe may be tempted to move in the IMF direction and push for debt relief, which refers to the partial or total forgiveness of debt by individuals, corporations or nations, there are political and economic negative implications for such a move.
â€œWhile the debt may seem insurmountable on face value, it can be serviced though the implementation of a comprehensive debt strategy that includes both robust economic policies and the effective exploitation of the countryâ€™s internal resources,â€ said Makwiramiti.
Another economic analyst, Mr. Sonni Mabheju said the fiscal authorities need to be cautious in looking at the IMF suggestion as debts may be transferred to debt vultures and be sold to the country at a higher rate.
The IMF proposal would also mean that the country will have to declare itself a Highly Indebted Poor Country, a proposal which has been a subject of debate within the country.
Zimbabwe owes the African Development Bank [ADB] a total of US$400 million, the World Bank US$1,2 billion and the IMF US$140 million.
The difficult economic environment owing to the illegal sanctions imposed on the country by the West saw the country attaining negative growth rates as well as accruing a huge external debt which is currently estimated to be close to six billion dollars.