IMF comes to town

Business
THE International Monetary Fund team will jet in tomorrow for a review of the second economic reform plan for Zimbabwe amid indications that the country has met some of its set targets.

THE International Monetary Fund team will jet in tomorrow for a review of the second economic reform plan for Zimbabwe amid indications that the country has met some of its set targets.

BY VICTORIA MTOMBA

The team will be in the country from August 31 to September 11.

Zimbabwe is under IMF’s Staff Monitored Programme (SMP), an informal agreement between country authorities and the Fund to monitor the implementation of the economic programme. This is the second SMP which began in October 2014 and runs up to December.

The team will comprise the mission chief assistant director in the African Department, Domenico Fanizza, three senior economists in the African Department, Murna Morgan, Natalia Koliadina and Edgardo Ruggiero, senior economist in the strategy, policy review department and Ali Jassim Al-sadiq, an economist in the finance department.

Finance minister Patrick Chinamasa said the country had met the targets and the team would come and stay until September 11 to review progress as at end of June 2015.

“As Treasury, we are happy with meeting our targets. It is now left to the team to see if we have achieved. It will be left to the team to decide whether or not they agree with us,” he said.

The country made progress on the SMP under the first review held in March. All quantitative targets and structural benchmarks were met and according to IMF, the authorities demonstrated commitment to the programme in a difficult economic and financial environment.

“Moreover, they have made meaningful progress in implementing other key structural reforms such as making operational an asset management company and amending the indigenisation and empowerment law,” the IMF said.

Under the SMP, Zimbabwe said its policy reform agenda this year would focus on reducing the primary fiscal deficit to raise the country’s capacity to repay, restore confidence in the financial system, improve the business climate and garner support for an arrears clearance strategy.

IMF said a strong performance under the SMP would improve Zimbabwe’s repayment capacity and demonstrate that it could implement reforms that could justify a Fund-financial arrangement, which could help tackle the country’s deep-rooted problems.

Chinamasa said a team that included the IMF, African Development Bank, the World Bank and government, and chaired by the Reserve Bank governor John Mangudya, had been put in place to look at resolving the country’s debt situation.

“The meetings have gone very well and we should in the not-too-distant future produce a paper for a buy-in from the multilateral creditors, Paris Club which are the big decision makers. The paper would be presented in Lima, Peru,” he said.

Zimbabwe owes IMF, World Bank and other creditors $8,4 billion as at end of June 2015. The government is working on the re-engagement process with creditors so that the country can get fresh capital.

Zimbabwe has been trying to mend its relations with multilateral financials as it seeks to secure cheap lines of credit to revive the economy. In 2013, IMF agreed to an SMP on Zimbabwe, a culmination of months of intensive lobbying by the inclusive government. Last year, IMF re-opened its Harare office that had been closed in 2004.