Chinamasa to stick to IMF programme

via Zimbabwe finance minister says to stick to IMF programme | Reuters  by MacDonald Dzirutwe

HARARE, Oct 3 (Reuters) – Zimbabwe’s finance minister said on Thursday the country will stick to an IMF monitoring programme that could pave way for the country to clear its debts, as the economy grapples with chronic power cuts and a crippled manufacturing sector.

Zimbabwe is still emerging from a decade of economic decline and hyperinflation, but the economy is stuttering in the aftermath of a disputed election in July that has extended President Robert Mugabe’s 33-year rule.

Harare began an International Monetary Fund-led staff-monitored programme in June which, if successful, could help it clear $10 billion in external debts and give it access to new credit from international lenders.

Under the programme, which is set to run until December, it is expected to implement a raft of economic reforms.

“We are committed to the programme,” Finance Minister Patrick Chinamasa told Reuters on Thursday.

He said he will travel to Washington this weekend to assure IMF officials there that Harare will continue with programme.

Consumers in the southern African nation have experienced electricity blackouts lasting up to 16 hours a day in recent weeks, which state-owned power utility ZESA attributes to maintenance work on its ageing power generating plants.

Energy and Power Development Minister Dzikamai Mavhaire said this week the only long-term solution to the power crisis was to invest in new plants, which will require billions of dollars and take time to build.

Zimbabwe has a peak demand of 2,200 megawatts of electricity, but only has a supply of 1,167 MW, including imports from Mozambique.

The electricity crunch has hit the manufacturing and agriculture sectors, where output has fallen although mines have largely been spared. Zimbabwe has the second-largest platinum reserves in the world after South Africa, as well as one of the biggest diamond deposits and large quantities of coal and gold.

“We are in the intensive care unit,” local media quoted Charles Msipa, head of the Confederation of Zimbabwe Industries as saying at the Wednesday launch of a report on the state of manufacturing, which showed many firms were operating at a third of capacity.

“Capacity utilisation is declining, in some accounts by alarming margins, leading to downstream effects like retrenchments and reduced activity on the domestic economy,” he said.

Manufacturers are battling with high financing costs, with banks charging as much as 20 percent interest, and with demands for higher wages from restless workers.

The power cuts have hampered irrigation of the winter wheat crop in a country that a United Nations agency says is facing its worst food shortages in four years.

Mugabe’s new government is crafting a new economic policy, but the 89-year old has vowed that all policies will revolve around his plans to force foreign-owned firms to give majority stakes to black citizens.

The policy, known as indigenisation, is seen as discouraging badly needed foreign investment and hindering access to IMF and World Bank funding.

Nevertheless, Zimbabwe’s stock exchange continues to recover after the industrial index plunged 11 percent on Aug 5, the first day of trading after Mugabe’s re-election.

The main index rose 14 percent in September alone in what traders said was a market correction from an overdone sell-off.

Foreign investors are mostly targeting Zimbabwe’s largest mobile firm Econet Wireless and SAB Miller’s local unit Delta, the two largest firms on the exchange.

“There was initial panic but investors have realised that while the government may not induce the desired economic recovery, there is no additional political risk,” a local stock broker said.

(Editing by Stella Mapenzauswa and Hugh Lawson)

 

COMMENTS

WORDPRESS: 7
  • comment-avatar
    Doris 7 years ago

    You can start by paying off the farmers for the compensation they are entitled to. This should pave the way for the exchange of title deeds for compensation. Title deeds enable the new farmers to borrow money from the banks. Agreed?

    • comment-avatar
      War Vet 7 years ago

      Doris, you are trippin, ask Britain to compensate you. Your title deeds are null and void in Zimbabwean law. What is needed is a tradable 99 year lease and other Governement guarantees as well as training and monitoring of new farmers.

      • comment-avatar
        munzwa 7 years ago

        moron, you still need to address the title deed issue, what collateral will a 99 year lease give and what incentive would there be to the farmer to repay when the Govt( taxpayer)will continue to bail out those with influence.

  • comment-avatar
    maisokwazo 7 years ago

    Chinamasa who can you bribe again? the IMF- try your luck. You shunned intelligent and constructive proposal meant to bail Zimbabwe out of this chaos and quagmire and chose to deride Zimbabweans by you sheninagens and stupid zealotry ignorance. You think you can cheat the economy. TRY YOUR LUCK knicampup LOOK EAST BUDDY LOOK EAST NUTTIE THE EAST YOUR ASS.

  • comment-avatar
    masvukupete 7 years ago

    Hopefully they will not be led by the IMF. But then do they really understand the concept of money and its operations. If they do not understand it and let the IMF lead us then we are doomed. The IMF should only be used as consultant in the game but he Chinamasa must lead the process. IMF programmes are not meant for our benefit, we have to weary on how we implement them IMF programmes, but then that can only be done by people who properly understand the impact of the programme design. If you o not understand something you cannot delve into the details of it but gloss over. The marrow is in the finer details of any system design. It cannot be done using laymen, we need expert consultations to make things work properly. But then has ZPF ever listened to voices of reason we wait with bated breath.

    • comment-avatar
      Tiger Shona 7 years ago

      Masvukupete, so in your expert opinion Chinamasa is the guy that should be trusted with this whole program?
      With a track record that these Zanu PF cabinet ministers have,
      and you recommend that, I have some advice for you.
      SHUT UP

  • comment-avatar
    munzwa 7 years ago

    this is a man who perverted our judicial system and now we are expected to believe his sincerity!I think not.