THE International Monetary Fund (IMF) is expected to schedule a board meeting in September to review Zimbabwe’s overdue financial obligations, sour
ces indicated this week, suggesting that fresh measures could be taken against Zimbabwe for non-cooperation with the multilateral lending institution.
The board meeting will open another anxious chapter in Zimbabwe’s relationship with the IMF after the country survived expulsion from the Bretton Woods institution when it settled its overdue financial obligations to the IMF’s General Resources Account (GRA) in February.
Sources indicated government and central bank authorities had been informed about the pending review, expected to take place exactly six months after an IMF board meeting that maintained censure of the country after payment of arrears to the GRA arrears.
Speculation has deepened in the market that Finance minister Herbert Murerwa was making frantic moves to block an IMF team due in the country around the same month for a routine Article IV consultation.
The mission’s findings, together with any attempts by the country to clear outstanding arrears, are meant to establish Zimbabwe’s cooperation with the Bretton Woods institution’s demands for an overhaul of economic and structural policies.
Article IV consultations are routinely conducted on IMF members, but Zimbabwe is understood to be digging in its heels on the planned visit, insisting its repayments should be rewarded.
Zimbabwe cleared its overdue financial obligations to the IMF’s GRA but still remained with substantial arrears amounting to US$119 million under the Poverty Reduction and Growth Facility (PRGF)-Exogenous Shocks Facility Trust (ESF).
An IMF spokeswoman told businessdigest from Washington that the IMF executive board had communicated with the Harare administration its desire for a comprehensive economic package to rescue the country from its economic quagmire.
“The executive board has asked Zimbabwe to adopt a comprehensive package of macroeconomic and structural policies to address the deteriorating economic situation,” the spokeswoman told businessdigest on Tuesday, two days before Murerwa’s fiscal policy review presented to parliament yesterday.
“The board also decided to maintain the remedial measures now in place,” the spokeswoman said, indicating that “the declaration of non-cooperation, suspension of technical assistance, and exclusion from the list of PRGF-eligible countries” remained firmly in place until Zimbabwe fully repaid its outstanding debts.
The Zimbabwe Independent reported last week on government’s latest plans to block an IMF mission to the country, but no confirmation was available from Murerwa who has ignored calls made to his mobile phone since last week.
While Zimbabwe survived expulsion from the IMF, the country has essentially lost all benefits of membership to the multilateral financial institution, an issue that has piqued the Harare administration which kept the money printing press running over the past year to raise cash to buy United States dollars to settle its GRA debt.
An IMF board meeting of March 8 refused to restore Zimbabwe’s voting and related rights and to terminate the country’s ineligibility to use the general resources of the Fund. The move upset government and central bank governor Gideon Gono who alleged politics in the handling of Zimbabwe’s case.