Taurai Mangudhla
An International Monetary Fund (IMF) mission is expected in Zimbabwe next week to hold discussions with the government on the country’s debt clearance strategy and the possibility of yet another Staff-Monitored Programme (SMP), George Guvamatanga, the permanent secretary of the Ministry of Finance and Economic Development, has said.
An SMP is an agreement between country authorities and IMF staff to monitor the implementation of the country’s economic programme. If the discussions go well, Zimbabwe will have its fourth SMP.
Since 2015, the government said it wanted to clear nearly $2bn owed to international financial institutions (IFIs).
Since then, government engagements with the IMF have been on going, although details remain classified, according to Guvamatanga.
“We are still very much in engagement with the World Bank and the IMF. An IMF mission is coming into the country in the first week of April to consider whether we can be under an SMP,” Guvamatanga said yesterday on Tambarara, adding that another SMP was crucial to Zimbabwe clearing its debt and arrears.
“I think those of you who are familiar with how you clear debt know that you can never clear debt without an SMP because you need to build some track record of performance which can be reviewed and supported,” Guvamatanga explained, and noted that Zimbabwe had made significant progress on the matter.
Although Guvamatanga said details of the engagements with the IMF were not for public consumption, as yet, he emphasised that Zimbabwe had to pay its debt.
“We have to pay what we owe if we want to open up the country to more investment and concessionary lines of credit,” the permanent secretary said. “We need to be able to access funding from IFIs. Even if we don’t want to borrow, we still need to repay.”
Asked about a possible bailout, Guvamatanga said the details were also classified. He, however, said if Zimbabwe should get a bailout, the government’s number one priority would be to clear its debt, followed by funding the productive sector.
