Staff Writer
In a significant development for Zimbabwe, the United States Congress has introduced a Bill to repeal the Zimbabwe Democracy and Economic Recovery Act (ZEDERA) of 2001 which imposed sanctions on Zimbabwe.
The proposed legislation aims to guide US foreign policy towards Zimbabwe and has far-reaching implications for the country’s economic relations with the US and international financial institutions.
“Repealing the Zimbabwe Democracy and Economic Recovery Act of 2001. (a) IN GENERAL, the Zimbabwe Democracy and 17 Economic Recovery Act of 2001 (ZEDERA Act), as amended, Public Law 107–99 (115 Statute 962) is hereby repealed.
“Condition on further funding for Zimbabwe- The United States shall not support any new or expanded funding from the International Monetary Fund (IMF) or the International Bank for Reconstruction and Development (commonly known as the World Bank),” reads part of the Bill.
It further asserts that Zimbabwe will only access funding under the below conditions.
1 Zimbabwe shall commit, within 12 months of the approval
2 of such new or expanded funding, to remit all outstanding
3 arrears owed under the Global Compensation Deed, inflation adjusted to the date of enactment, and compensation
5 shall not be in the form of Zimbabwe issued securities.
6 Failure to comply with this provision shall result in an
7 immediate cessation of all United States support for any 8 further funding from these institutions.
Zimbabwe is actively pursuing a comprehensive Zimbabwe Arrears Clearance and Debt Resolution process championed by the African Development Bank (AfDB).
Zimbabwe’s total public debt is estimated at US$21 billion as of June 2024, with external debt at US$12.3 billion, while domestic debt amounts to US$8.7 billion.
External debt is owed to bilateral and multilateral creditors, with the IMF accounting for US$3.1 billion. Out of this multilateral debt, $681 million is owed to the African Development Bank, $1.5 billion to the World Bank, and $427 million to the European Investment Bank.
A New Era for Zimbabwe?
If passed, the repeal of ZEDERA would mark a significant shift in US policy towards Zimbabwe. The act, which imposed economic sanctions on Zimbabwe, has been a major obstacle to the country’s economic growth and development. The proposed bill would potentially ease these sanctions and improve Zimbabwe’s access to international funding.
Implications for Zimbabwe’s Economy
The proposed bill has significant implications for Zimbabwe’s economy. If passed, it could potentially unlock new funding opportunities and support the country’s economic growth and development. However, the conditions attached to funding support may still pose challenges for the Government of Zimbabwe.
A Step Towards Economic Recovery?
The introduction of this bill is a positive development for Zimbabwe and may mark the beginning of a new era of economic cooperation between the US and Zimbabwe.
What’s Next?
The bill will now go through the legislative process, with debates, hearings, and votes expected in both the House of Representatives and the Senate. If passed, it will then be sent to the President’s desk for signature into law.
