Why Zimbabwe plans to issue sovereign bonds

PUBLISHED: Tue, 24 Apr 2018 14:58:24 GMT

HARARE (Reuters) – Zimbabwe is considering issuing between $2.5 and $3.5 billion in sovereign bonds after elections set for July and will use some of the money to clear arrears to foreign lenders, Deputy Finance Minister Terrence Mukupe said on Tuesday.

Mukupe, whose comments were broadcast on state television, said the southern African nation would use export receipts from tobacco, gold and horticulture to repay the bond.

“The position that we have is that post election we should be able to put in place a sovereign or export-related bond and we think we should be able to raise between $2.5 to $3.5 billion,” Mukupe said.

During a speech in London on Monday, Foreign Minister Sibusiso Moyo said his country was committed to clear about $1.8 billion in arrears with the World Bank and the African Development Bank before it taps other sources of financing.

Zimbabwe has not received funding from the World Bank, International Monetary Fund and African Development Bank since it defaulted on its debt in 1999.

Under President Emmerson Mnangagwa, who succeeded Robert Mugabe last November, Zimbabwe is trying to mend ties with the West, including rejoining the Commonwealth.

Reporting by MacDonald Dzirutwe; Editing by Ed Stoddard

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