THE International Monetary Fund (IMF) is set to re-open its local office later this year, a decade after its closure, signalling the warming of relations between the global lender and Zimbabwe, a top official has said.
BY NDAMU SANDU
IMF deputy director for Africa, Roger Nord told Standardbusiness the re-opening of the office would give the global lender a continuous presence to help in the supervised economic reform plan, the Staff Monitored Programme (SMP).
“Having an office in Zimbabwe will be helpful because it will allow us to have a continuous presence and help Zimbabwe to tackle its major challenge, which is to normalise relations with all the creditors,” said Nord.
He said the IMF had a Staff Monitored Programme with Zimbabwe that was supposed to end in December but was extended by six months to June.
“The Staff Monitored Programme has led to a very welcome dialogue, much more active dialogue between IMF and Zimbabwe. Not just the IMF but other international partners,” said Norad.
In June, IMF and Zimbabwe agreed on an SMP — an informal agreement between country authorities and the Fund staff to monitor the implementation of the authorities’ economic programmes — following intensive lobbying by the inclusive government as part of its re-engagement with the global lender.
The SMP focusses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities, and restructuring the central bank.
The SMP was extended to June from December “to allow time for the national authorities to strengthen their policies and deliver on outstanding commitments under the programme”.
Nord said the processes towards reopening the office would take a couple of months but was optimistic this would be complete in the summer.
The process includes, among others, the recruitment of local staff.
IMF closed its Harare representative office in October 2004. The resident representative had left a year earlier, leaving local staffers to man the office.
At the time IMF said the closure of the office was not linked to Zimbabwe’s overdue financial obligations to the Fund but that a number of factors were considered to maintain a resident representative office, including the intensity of programme involvement and the regional economic importance of the member country.
Nord said relations between Harare and Washington had improved significantly and there was goodwill on both sides to make the SMP work.
“The extension of the Staff Monitored Programme was also a positive signal that we wanted to continue this relationship,” he said.
Nord said the mission, currently in Harare for the annual Article IV consultation, would be discussing the next steps after the SMP.
Zimbabwe requires lines of credit to help rebuild the economy that is showing signs of serious depression. IMF is considered the international “commissioner of oaths” and if it gives a country thumps up, other lenders would be triggered to follow suit.
In 2005, Zimbabwe escaped expulsion from the Fund after it made a hasty payment a week before the IMF Executive Board was supposed to meet to seal Harare’s fate.
The formation of the inclusive government kick-started the normalisation of relations with the restoration of voting rights in 2010. Zimbabwe had lost its IMF vote in 2003.