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Zim economy at crossroads — IMF

The Zimbabwe economy requires comprehensive reforms to sustain higher growth rates and poverty reduction, the International Monetary Fund (IMF) said on Friday.

BY OUR STAFF

“Zimbabwe’s economy is at a crossroads. The economic situation remains difficult,” IMF said.

IMF said Zimbabwe’s external position was precarious, with low international reserves, a large current account deficit, an overvalued real exchange rate and growing external arrears.

The warning comes as the ruling Zanu PF government has relegated economic issues to the periphery as politicians jostle for positions ahead of next month’s elective congress.

It also comes as IMF approved a successor to its supervised economic reform plan on Zimbabwe. The plan, Staff Monitored Programme (SMP) runs up to December 2015.

IMF said the successor SMP was aimed at laying the foundations for comprehensive reforms.

“The main objective of the new programme is to strengthen the country’s external position, as a prerequisite for arrears clearance, resumption of debt service, and restored access to external financing,” IMF said.

Zimbabwe has an external debt of over US$9 billion which has militated against the inflow of lines of credit from multilateral financial institutions.

IMF said Zimbabwe “will strive to consolidate the fiscal position, eliminating the primary budget deficit by end-2015”.

It said Zimbabwe “will also aim to accumulate international reserves and seek to mobilise international support for resolving the country’s external debt situation”.

Zimbabwe also promised to restore confidence in the financial sector, as well as improve public debt and financial management. IMF said Zimbabwe plans to make progress in a number of key structural reform areas in order to enhance the business climate, boost productivity and competitiveness, and build confidence.

“Successful implementation of these reforms will demonstrate that the country can implement the policies that could justify a Fund-financed programme,” IMF said.

Zimbabwe has in the past five years made moves to lure IMF widely considered as the international financial “commissioner of oaths”.

The renegotiations culminated in IMF agreeing to a Staff Monitored Programme on Zimbabwe last year. IMF recently reopened its Harare office that had been closed in 2004.

3 Responses to Zim economy at crossroads — IMF

  1. ross November 9, 2014 at 9:41 pm #

    What a waste of time

  2. Stuart November 19, 2014 at 1:10 am #

    To make the land produce, wounds need to be healed. Those wounds have had an effect upon the economy. Creating a duel currency, the one in place is external the other internal. Depletion of natural resources with a weak international currency leaves behind a sparse economy. Better to site on the resource and watch it grow as an investment.

  3. Stuart November 19, 2014 at 1:27 am #

    Instead of farming cattle why not water buffalo or some other heard animal that Zimbabwe already has and that does not need all the trees cut down and hauled off, before they can be farmed. Why not grow farm and breed Roebuck or Springbok deer and export them to places that used to have vast herds of them, which would be good for the external economy, while also replenishing those lands with new herds and also help feed the local population in the internal economy.

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