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IMF says no new cash until Zimbabwe pays debts

24 September 2014, 12:01

Harare - The International Monetary Fund has scotched suggestions that cash-strapped Zimbabwe could get fresh financial aid, saying it must first service old debts.

Domenico Fanizza, a senior official from the IMF's Africa department, said the Washington-based lender "by its law" could not give more support until Robert Mugabe's government makes up missed repayments.

"That's the real problem, we need to solve that problem," he said in Harare on Tuesday.

The country is saddled with debts of over $10 billion (7.8 billion euros), according to an AFP tally of finance ministry figures, and has stuttered in making repayments.

According to Fanizza, the country is currently $142 million in arrears. "This is not much money... but it's a problem," he told journalists and business leaders.

Facing yet another economic crisis, Finance Minister Patrick Chinamasa has sought to have Zimbabwe's debt cancelled.

"What we want to see basically is the cancellation," Chinamasa told the meeting on Tuesday.

"Total relief, if we can't get that as the first prize then we should look at rescheduling.

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"Any of those would help us basically to relieve us of the temporary immediate burden of servicing our loans so that we are able to use the money for purposes of reviving our economy."

Kick-starting Zimbabwe's stalled economy would require vast amounts of foreign capital, at a time when Harare has effectively been frozen out of debt markets.

The central bank has revealed that foreign investment more than halved in the first six months of the year.

The IMF official hailed Zimbabwe's "ambitious" economic blueprint, but warned it "cannot be achieved without the financial support of the international community".

Zimbabwe's economy has been on a downturn for over a decade with shortages of cash and industries operating below capacity, or shutting down outright.

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