Finance Minister Mthuli Ncube dismissed rapidly accelerating inflation as “wage compression” and warned the country it will have to endure four more months of economic pain. File Photo: IOL
HARARE – Zimbabwe plans to borrow $1.9 billion from the Group of 7 industrialized states to clear its debts to the African Development Bank (AfDB) and the World Bank, Finance Minister Mthuli Ncube has said.

Mthuli said immediately after clearing the debt, Zimbabwe would seek $1 billion from the two multilateral financial institutions to repay the G7 debt, the Herald newspaper reported Monday.

The minister said Zimbabwe also expected the Paris Club, whom it owes $2.8 billion, to forgive part of the debt.

The G7 is made up of the United States, Britain, France, Italy, Canada, Germany and Japan. Mthuli said Zimbabwe's total external debt stood at approximately $8.5 billion as at end of June this year.

The debts, owed for over a decade now, have prevented the country from accessing fresh capital from the multilateral financial institutions to help revive the economy.

This is despite the fact that the country in 2016 cleared its 108 million dollars arrears with the International Monetary Fund (IMF).

The finance minister said Zimbabwe will need to first complete a staff monitored program (SMP) with the IMF to restore sound and sustainable macro-economic fundamentals to be in good standing for fresh credit.

The SMP is Zimbabwe's second in five years, and will run for 10 months from June 2019 to March next year.