Zimbabwe is attracting self-financing investments,
particularly from China, and hence there are no fears of Harare falling into a
debt trap, the President has said.
The Head of State and Government said this to Zimbabweans
resident here at a lively and well-subscribed interaction with them on Sunday.
President Mnangagwa is here for the 73rd Ordinary Session
of the United Nations General Assembly, where he will deliver his maiden
address to the world’s biggest international organisation since he won the July
2018 harmonised elections.
In a segment of the interaction during which he took direct
questions from Zimbabweans, the President was asked what his administration was
doing to ensure the country did not fall into a debt trap that could have dire
consequences on developmental aspirations.
President Mnangagwa said most of the money coming from
China was going towards revenue-generating infrastructure projects that would
pay themselves off.
He said, “During (Zimbabwe’s) period of isolation, very few
countries outside the West assisted us. Some of the notable countries which
came to our assistance are China, India, Brazil, Russia and Malaysia.
“And when things are good you then do not forget your
friend who stood with you during bad times, but you do not sell your country
because somebody stood with you during bad times.
“What is necessary when you get loans or investment, it
must be structured. (There is need for) investment in projects which can
re-finance themselves to pay the loan.”
President Mnangagwa cited the two massive capital projects
of the expansion of Kariba South and Hwange power stations, which are financed
with Chinese capital.
“I do not see any danger where you have a project which
becomes productive in terms of revenue streams to pay for itself,” he said.
“When you finish paying the loan, the asset remains with us
and we will continue to have electricity so I do not see the danger there.”
Weighing in on the issue, Finance and Economic Development
Minister Professor Mthuli Ncube, who is part of the President’s delegation on
the visit to New York, said China was “where the money is”.
Prof Ncube also said African countries should negotiate
sustainable terms when seeking loans.
“We have a very strong debt sustainability analysis
framework which allows us to understand whether we are over indebted or not,
(whether) we can pay or not.
“The Chinese also do that analysis themselves and if they
find out that you cannot pay they do not lend you the money, this is not free
money,” he said.
At the recent Forum on China-Africa Co-operation, Beijing
unveiled a $60 billion package to support development on the continent over the
next three years.
Beijing’s cumulative assistance to African development
initiatives since 2000 was about $124 billion by 2016. Herald
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