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Zim defaulted on repaying loans: EU

Zimbabwe has not been accessing loans from the European Union (EU) financial institutions, not because of any stringent lending conditions but failure by the former to service previous loans, a top diplomat has said.

This is however contrary to the government narrative that the country is not accessing lines of credit from international financial institutions because of economic sanctions imposed by the EU and the United States of America.

Responding to a question on the lending conditions for the EU during a meeting with Bulawayo scribes Wednesday, the 28-member economic bloc’s ambassador to Zimbabwe, Timo Olkkonen, said the conditions were not that stringent.

He said repayment of loans guarantees future loans, adding Zimbabwe defaulted long back.

“The issue on public loans like I said it’s linked to the fact that Zimbabwe hasn’t serviced its loans since the end of 1990s; so it defaulted on its loans,” said Olkkonen.

The ambassador said with Zimbabwe having defaulted on loans from individual EU member states, World Bank, African Development Bank, the International Monetary Fund (IMF) and the European Investment, it would remain difficult for the country to receive future loans.

“This happened already from the late 1990s onwards,” explained Olkkonen.

“What this then means is that as long as Zimbabwe has not cleared the debt that is owed to those institutions, they will not be able to provide new loans. It’s not the conditionality but it is a rule. It is a rule not only for Zimbabwe but for those engagements.”

He added that loans extended by creditors needed to be accounted for, adding repayment was key.

Olkkonen also said European investors intending to invest in Zimbabwe were very much concerned with the security of their investments, adding, policy predictability and consistency were paramount.

“The reason why you put your money is that you want to get profit out of that,” he said.

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