BUSINESS REPORTER
Zimbabwe is committed to discussions with the International Monetary Fund (IMF) for a supervised economic reform plan to build a sound policy base as it plots a future programme backed by the Bretton Wood institution, Finance minister Mthuli Ncube has said.
Last year, then IMF managing director Christine Lagarde approved a 10 months Staff Monitored Programme (SMP) intended to assist Zimbabwe in building a track record of implementation of a coherent set of economic and social policies that can facilitate a return to macroeconomic stability and assist in reengagement with the international community.
The SMP ended early this year with IMF saying the economic supervised reform programme was off-track due to mixed policy implementation adding that delays and missteps in forex and monetary reforms have failed to restore confidence in the new currency.
In his presentation to governors during the virtual African Development Bank (AfDB) annual meetings held last week, Ncube said Zimbabwe was committed to IMF reforms in addition to clearing its outstanding obligations to international financial institutions.
“Government is still committed to discussing with the International Monetary Fund a recalibrated Staff Monitored Programme in order for us to continue to build a successful track record of sound policy towards a future financial Fund supported Programme,” Ncube said.
An IMF team was supposed to be in Zimbabwe in April for discussions on a successor SMP. The team could not come due to the global lockdown to combat the spread of the Covid-19 pandemic.
But in March, the global lender said Zimbabwe had missed set targets.
IMF said Zimbabwe has yet to define the modalities and financing to clear arrears to the World Bank and other multilateral institutions and to undertake reforms that would facilitate resolution of arrears with bilateral creditors.
This continues to constrain Zimbabwe’s access to external official support. It said Zimbabwe remained in debt distress with large external arrears to official creditors and encouraged the authorities to give impetus to reengagement efforts and debt management and transparency.
“In particular, they (IMF directors) cautioned against continued recourse to collateralised external borrowing on commercial terms as this may potentially complicate any future arrears clearance operation,” IMF said.
It said notable reforms include a significant fiscal consolidation that has helped reduce the monetary financing of the deficit, the introduction of the new domestic currency in February 2019, the creation of an interbank forex market and the restructuring of the command agriculture financing model to a public-private partnership with commercial banks.
IMF is considered as the international “Commissioner of Oaths” which gives signal to other lenders on a country.
