ZIMBABWE is not likely to get financial assistance from the International Monetary Fund (IMF) until it pays its arrears to the multilateral lender and the United States lifts sanctions on the country.
This means Zimbabwe will not benefit from the fund’s relaxed measures to bail out low-income countries.
According to a transcript of a press conference that followed after last Saturday’s IMF meeting in Washington, sanctions imposed by the US bar Harare from accessing lines of credit and balance of payments support.
Finance minister Tendai Biti last week led a Zimbabwe delegation to the IMF Spring meetings where he lobbied for re-engagement with the fund and the World Bank after years of frosty relations.
The Southern African Development Community is trying to marshal financial resources to bankroll Zimbabwe’s Short-Term Emergency Recovery Programme.
Â “At present as the situation is, the fund cannot provide financial resources for Zimbabwe because there are still sanctions in the fund with Zimbabwe, so to start that process, there will be a need to lift those sanctions and also for Zimbabwe to repay arrears to the fund and other international financial institutions,” the IMF deputy director for the African Department, Saul Lizondo, was quoted as saying.
The country has outstanding arrears of US$125 million to the IMF million and its voting rights were suspended inÂ 2003.
The IMF Executive Board last week introduced a raft of reforms that will, among other things, see the board stopping the approval of any structural performance criterion in any programme carried out by the fund.
“The IMF has streamlined the financing terms by lengthening grace periods by about one year for the Stand-by Arrangements, about two to three years for the Extended Fund Facility which is an instrument that is expected to be used more broadly by low-income country members that graduate from the Poverty Reduction and Growth Facility,” said the IMF.
“We’re hoping to do some small, technical assistance in the key areas of the fund’s mandate, and we encourage others to do the same. And we’ll work with the Zimbabwean authorities to continue to make progress on the reform effort.”
Zimbabwe requires US$8,5 billion to finance its economic revival.
The IMF said there were “encouraging developments” in Zimbabwe on the economic front.
“And as things improve in Zimbabwe, of course we’ll see some of those refugees return. And it’s the context in which we think there’s a window of opportunity in Zimbabwe that is worthy of support by the international community,” the fund’s director of African Department, Antoinette Sayeh, said during the same press conference.
“We, for our part, are hoping to help in the ways we can currently, and those are mostly through policy advice, our Article IV discussion with the authorities was one form. We’re hoping to do some small, technical assistance in the key areas of the fund’s mandate, and we encourage others to do the same.
And we’ll work with the Zimbabwean authorities to continue to make progress on the reform effort.”
Meanwhile, an IMF team that visited Harare last month to carry out Article IV discussions will submit a report to its board on Monday. That report will then be submitted to government for comments before it is made public.
BY BERNARD MPOFU