Government urged to ring-fence mining royalties

STAKEHOLDERS in the mining sector have urged the Government to ring-fence part of mining royalties and channel the funds towards national debt clearance.

In December last year, the Government made a deliberate decision to establish the Structured Debt Resolution and Arrears Clearance platform which institutionalised the country’s dialogue around debt and arrears issues.

The Structured Debt Resolution and Arrears Clearance platform is led by African Development Bank (AfDB) president Dr Akinwumi Adesina, with former Mozambique President Joaquim Chissano being the high-level facilitator.

About five engagements have so far been held with creditors, including during the AfDB annual general meetings in Egypt in May, as Harare sought to demonstrate to creditors that it is determined to address its obligations. Zimbabwe’s consolidated debt amounts to US$17,5 billion.

Debt owed to international creditors stands at US$14,04 billion while domestic debt is US$3,4 billion, with debt owed to bilateral creditors estimated at US$5,75 billion, and debt to multilateral creditors is estimated at US$2,5 billion.

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During a three-day 12th Zimbabwe Alternative Mining Indaba held in Bulawayo last week, stakeholders said the mining sector has the potential to play a key role in clearing the national debt.

Zimcodd heard of programmes, Mr John Maketo told Business Chronicle that there is a need to explore ring-fencing mining royalties towards debt management.

“The idea of ring-fencing is very important, we are saying we want to be deliberate in channelling some resources towards repayment of public debt,” he noted. “We need to be holistic in our approach to debt management and sustainability of the debt itself because mining alone cannot handle this. Let’s make sure that there are no financial flows and leakages, every cent that is generated must either go to public debt management or national development.”

Speaking at the same event, Finance, Economic Development and Investment Promotion Parliamentary Portfolio Committee Chair Mr Clemence Chiduwa said it is important for the country to be in compliance with its debt clearance strategy. —chronicle