Despite the clearance of the arrears Zimbabwe still owes says $687 million to the African Development Bank, $1.4 billion to the World Bank, $322 million to the European investment bank.

Mr Rice said “We have talked quite a bit about Zimbabwe here in the past but just to answer the question, and I’ve said it before here, that Zimbabwe has cleared, indeed, its arrears to the IMF.

He says “ I think that’s the word I would want to stress, is the “peacefully” and, you know, try to develop policies that will stabilise the economy and promote sustainable and inclusive growth and it’s clearly a very difficult situation there in Zimbabwe and we recognise that”.

A report released by the African Department of the IMF last week reveals that Zimbabwe’s expenditure is way above that of its counterpart and not effective.

The report proposes that the South African country cut wages for its top civil servant by 5 percent.

It also wants the country to limit the transfer of State Owned Enterprises, rationalise agricultural input schemes and address issues with regards to grain subsidies.

Helping hand from South Africa

South Africa last month offered to help its neighbour Zimbabwe clear its $7.4 billion external debt in the wake of recent economic turmoil.

South African Finance Minister Tito Mboweni who confirmed the report says talks between the two countries are ongoing.

The talks between the two neighbours will focus on clearing the debt owed the donor multilateral institutions such as the Paris Club.

The Paris Club is an informal group of official creditors who try to find sustainable and coordinated solutions to payment problems that debtor countries experience.