Economy, Business And Markets

Zimbabwe Debt Defaults Affect Iran Ties

Zimbabwe Debt Defaults Affect Iran Ties Zimbabwe Debt Defaults Affect Iran Ties

Bilateral cooperation between Zimbabwe and Iran has been hampered by Harare’s failure to settle its €16 million ($17.4 million) debt to Tehran.

According to minutes of the eighth session of the Joint Permanent Commission Between Zimbabwe and Iran, “both countries emphasized the requirement to make the final drawdown of the balance of the official development aid of $500,000 extended to Zimbabwe by Iran under the Motira tractor project, NewsDay reported on Monday.

 “The commission noted the agreement by lender CBZ, the [Zimbabwean] Ministry of Finance and Economic Development, and the Export Guarantee Fund of Iran, to reschedule the loan’s repayment over a five-year period. It also welcomed the first payment of €1.5 million ($1.6 million) made in May 2015, and another payment of €700,000 ($763,000) expected in September 2015,” the minutes read.

The commission noted the willingness by the Iranian lender to cover new credits extended to Zimbabwe and urged new applicants to make payments on time.

The minutes said the two parties also agreed to focus on few but feasible projects that were mutually beneficial to both countries.

Foreign Affairs Permanent Secretary Joey Bimha conceded that financial constraints had hampered the two countries’ corporation, last Tuesday.

The two nations currently have several memoranda of understanding and bilateral investment promotion and protection agreements that stagnated because of Zimbabwe’s failure to honor its dues.

Zimbabwe’s Foreign Affairs Minister Simbarashe Mumbengegwi last week said trade between his country and Iran was lower than anticipated. Mumbengegwi was speaking on the sidelines of the closing ceremony of the session at the Rainbow Towers in Harare.

He said low trade was a result of failure by the two countries to conclude most of their bilateral investment agreements.

“We still have to sign a trade agreement and that is a very important document and we also have to finalize the Bippa because that is also very important in stimulating trade between our two countries since it encourages investment in both countries. So these are areas we need to attend to in order to be able to increase our volumes of trade,” Mumbengegwi said.

He said the Bippa had to be renegotiated on account of setbacks caused by the land reform programme.