IMF aborts Zim visit

THE International Monetary Fund (IMF) has abandoned its much-awaited visit to Zimbabwe amid indications the country’s arrears clearance plan approved in Lima, Peru, last year has totally unravelled. ‘

Source: IMF aborts Zim visit – The Zimbabwe Independent September 23, 2016

THE International Monetary Fund (IMF) has abandoned its much-awaited visit to Zimbabwe amid indications the country’s arrears clearance plan approved in Lima, Peru, last year has totally unravelled.

By Bernard Mpofu

An IMF mission was supposed to be in Harare two weeks ago to liaise with the government over the arrears clearance plan ahead of the fund’s annual meetings in the United States from October 3-9 this year.

The Zimbabwe Independent has also established on good authority that the Bretton Woods lender was now contemplating a new programme for Zimbabwe that might only come into effect after the 2018 elections, meaning the country will almost certainly no longer access the US$2 billion from international financial institutions.

This comes after the Independent last week reported that fierce behind-the-scenes battles have erupted in and around the International Monetary Fund (IMF) to ensure Zimbabwe is not discussed at the annual meetings of the boards of governors of the IMF and World Bank Group in Washington DC as the debt-ridden country seeks to secure new funding.

IMF country representative Christian Beddies said government officials were now expected to appraise the multilateral financial institution of Zimbabwe’s debt-and-arrears clearance plan during the annual meetings.

“The dates have not been finalised. I think they will finalise with the authorities (government) when they go for the annual meetings,” Beddies said in a telephone interview yesterday.

The annual meetings are usually held for two consecutive years at the IMF and World Bank headquarters in Washington DC and every third year in another member country.

The last time the IMF deliberated on Zimbabwe was on May 2 when its executive board concluded the Article IV Consultation with Zimbabwe and the third review under the Staff-Monitored Programme.

The rescheduling of the visit comes at a time Zimbabwe’s economic crisis is deepening as reflected by tight liquidity conditions resulting from limited external inflows and lower commodity prices. Inflation has also remained in negative territory on the back of a firming US dollar against regional currencies.

Meanwhile, IMF director of communications Gerry Rice a fortnight ago told reporters in Washington DC that the fund had not finalised any bailout package for the debt-ridden southern African nation.

“And again, I want to repeat that there’s no financing programme under discussion with Zimbabwe at this point.

Indeed, the authorities have announced a plan to clear the arrears. Once they are cleared, which they are not at this point, our board would need to discuss that,” Rice said.

“Meet, discuss that, and approve the normalisation of relations with Zimbabwe, and only after that could other things happen. But again, there is no financing programme under discussion with Zimbabwe at this point.”

Time is also running out for the debt-ridden government to settle its US$1,8 billion arrears to preferred international financiers — World Bank, International Monetary Fund (IMF) and the African Development Bank (AfDB) — in order to access AfDB bridge financing for distressed countries like Somalia, Sudan and Zimbabwe.

According to an AfDB internal memo titled “Zimbabwe Processing of Debt Arrears Clearance Information Note for July 2016: The African Development Fund-13 Report”, the regional bank’s deputies agreed to ring-fence Transition Support Facility Pillar II resources for arrears clearance of Somalia, Sudan and Zimbabwe on a first come, first served basis.

This means should Zimbabwe, which has already missed its June 2016 deadline to meet its commitments, fail to repay arrears, the window could be closed

The AfDB said while government has shown commitment to implementing reforms, Zimbabwe has up to October this year to demonstrate how it wants to tackle its arrears before the facility is closed in December.