NDAMU SANDU
A team from the International Monetary Fund (IMF) begins its one-week mission to meet Zimbabwe’s new economic team following recent appointments to Cabinet and key ministry posts by President Emmerson Mnangagwa.
President Mnangagwa recently appointed banker and former African Development Bank (AfDB) chief economist Mthuli Ncube as Finance and Economic Development minister and banker George Guvamatanga as Treasury permanent secretary.
“The mission wants to meet the new economic team and discuss the roadmap going forward. The mission will be led by Gene Leon,” a source told Business Times last night.
An IMF team for the annual Article IV consultations will be in Zimbabwe in the last quarter of the year. The visit by the Leon-led team comes at a time Zimbabwe is working on an economic stabilisation programme which Ncube said would be unveiled next month adding the world “wants to hear from us” on our economic pathway. Zimbabwe owes $623 million to the African Development Bank (AfDB) and $1,1 billion to the World Bank, a move which has hindered access to cheap lines of credit. Last week, outgoing UK ambassador to Zimbabwe Catriona Laing said Zimbabwe required more economic and political reforms to fully engage the international community.
“The UK and other creditors would be interested to hear what you say and to see what the timelines are going to be because I think the sooner we get on track with some of these challenging reforms, the better. But we recognise that you will need support and we are here to provide that support and try and encourage a process of back to an IMF programme, perhaps through an interim Staff Monitored Programme.”
A Staff Monitored Programme (SMP) is a supervised economic reform plan undertaken by IMF members with support from the global lender. In 2013, IMF approved an SMP for Zimbabwe which ran up to the end of 2015 where Zimbabwe met all the benchmarks. IMF spokesperson Gerry Rice said last week that reforms require a comprehensive stabilisation and structural reform programme from Zimbabwe and financial support from the international community to provide space for these reforms.
He said the global lender was ready to help Zimbabwe design a reform package that can help facilitate the clearance of external payment arrears to international development banks and bilateral official creditors and that then would open the way for fresh financing from the internal community including potentially the IMF.
“But, again, just to stress as we said before, potential financial support from the Fund is conditional on the clearance of those arrears to the World Bank, the AfDB and financing assurances from bilateral official creditors. We are working with the Zimbabwean authorities in the meantime to provide policy advice and technical assistance that might help, could help move that process forward,” he said.
Zimbabwe has been mending its relations with IMF culminating in Harare last year clearing the $108 million arrears to the Bretton Woods institution. The obligation had been outstanding since 2001.
IMF responded a month later by removal of remedial measures that applied to Zimbabwe. The measures included the declaration on noncooperation with IMF, suspension of technical assistance which had partially been lifted and renewal of Zimbabwe to the list of Poverty Reduction
