THE International Monetary Fund (IMF) board this week resolved to maintain sanctions against Zimbabwe until the payment of US$119 million owed to it.
Contrary to statements by Reserve Bank governor Gideon Gono, Zimbabwe has not recovered
its voting rights.
The fund called on Zimbabwe to speed up reforms to reverse its economic spiral.
It said it had been owed US$119 million for its Poverty Reduction and Growth Facility — Exogenous Shocks Facility Trust Fund since February 2001.
The IMF board, which met on Wednesday, said Zimbabwe’s voting and related rights remained suspended despite last month’s payment of US$9 million to the general resources account.
It said Zimbabwe was still ineligible to use the general resources fund.
“Following the discussion, the executive board decided not to restore Zimbabwe’s voting and related rights and not to terminate its ineligibility to use the general resources of the fund at this juncture,” the IMF said.
The government had hoped its payment of US$9 million last month, clearing its general resources account arrears, would persuade the fund to soften its stance and restore its voting rights and resume balance-of-payments support.
Zimbabwe urgently needs balance-of-payments support to help resuscitate its battered economy.
However, the board this week made it clear that that payment alone would not save Zimbabwe. The decision shows the IMF is not convinced that the current policies will achieve a turnaround. It said a comprehensive package of reforms was needed.
The board repeated its concerns over the economic crisis in the country insisting — as they have done since 1997 — that Zimbabwe implement policy changes.
“It noted that Zimbabwe’s economic crisis calls for urgent implementation of a comprehensive policy package comprising several mutually reinforcing actions in the area of macroeconomic stabilisation and structural reforms.”
The IMF has in the past recommended that government opens the economy, reduces its budget deficit and abolishes price controls. It encouraged reforms for loss- making parastatals and warned government against reckless printing of money.
The fund has raised concerns with central bank’s quasi-fiscal role and recently blasted it for fuelling inflation through its actions.
Despite promises to implement the recommendations, Harare has maintained its populist policies to sustain its waning support. The decision means that Zimbabwe will not be able to secure any financial assistance from the IMF.
The decision by the IMF is likely to put pressure on the government to raise more funds to clear its debt. The IMF decision to maintain the sanctions came despite pleas by Gono and Finance minister Herbert Murerwa who were in Washington this week to argue Zimbabwe’s case.