IMF remains mum after Zim misses diamond remittance deadline

via IMF remains mum after Zim misses diamond remittance deadline | SW Radio Africa by Alex Bell

There is yet to be an official statement from the International Monetary Fund (IMF) after Zimbabwe missed a June deadline to remit diamond cash to the Treasury, raising doubts about the country’s ability to implement a debt relief plan.

The end of June was the deadline for regulations to be in place to control the flow of remittances from the diamond sector. This was in the wake of repeated concerns by the then Finance Minister Tendai Biti, that no cash was being funneled into the national coffers from diamond mines.

The deadline was part of an agreement between the IMF and Zimbabwe, called a Staff Monitored Programme (SMP), signed at the beginning of June. The SMP, which ends this December, was agreed to by the IMF as part of efforts to support Zimbabwe’s plans to pay off its massive international debt, which stands close to $11 billion.

As part of the agreement, Zimbabwe said it would issue a ‘Statutory Instrument’ and a report “accounting in detail for the diamond dividends, royalties and other diamond-related cash flows received in 2012 by Treasury from all enterprises in joint venture partnerships with ZMDC involved in the diamond industry,” the government told the IMF.

But more than two months since the end of the deadline, a ‘Statutory Instrument’ has still not been issued, raising concerns about whether Zimbabwe will be able to undertake the other reforms it promised before December.

The situation has added to high concerns about Zimbabwe’s economic future, which the World Bank has said remains “uncertain.” In its Economic Briefing for September, the World Bank said that Zimbabwe’s 2014 outlook is bleak, saying “growth in Zimbabwe is rapidly fading… with little prospects for a recovery in 2014.”

Economics Professor Tony Hawkins explained that Zimbabwe’s economic forecast is influenced by different factors, including external forces like commodity prices. He explained that internally, uncertainty has been created by many issues, including the recent elections and the concerns about the IMF debt relief plan.

“It was quite clear to me that it (the SMP commitments) would never be met, particularly not anytime soon, and therefore we are on a back foot,” Hawkins said.

He explained that Zimbabwe needs to make “ground shaking” changes to its economic policies, particularly regarding the controversial indigenisation laws that have scared off many foreign investors.

“The government has to start with changes to indigenisation because we need foreign direct investment desperately,” Hawkins said.

He added that the elections have made the economic situation even more desperate, after ZANU PF promised massive debt cancellations, financial investment and job creation while it was electioneering.

“This isn’t going to happen and another crisis of expectation has been created… It really is a pie in the sky situation and promises have been made that no one knows how they are going to be financed,” Hawkins said.

COMMENTS

WORDPRESS: 8
  • comment-avatar

    And so, what little good came out of the GNU is going to be reversed now, so that Mugabe can go back to running things the only way that he knows how to – INTO THE GROUND!

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      Kevin Watson 7 years ago

      The money was stolen by the Zanu PF kleptocrats to fund the theft of the election.

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    Shame 7 years ago

    If anything, the IMF should not be paid a single dimme. These Imperialist Breton Woods thieves sucked Africa for long to build their financial base. They sold african people as slaves, they took African Land and farmed it for free, and they stole hodes of minerals whilst using africans at tomfoolery labour rates. Tell the IMF in the face that they are thieves, and they stole more than 11 billion dollars from Zimbabwe between 1896 and 2000. They should bring that loot back. Now its time to own up, and ante up!

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      You are very confused. Perhaps you should seek professional help so that you can deal with your delusions. You need to look within for the solutions. Blaming others for your choices never works and just makes you bitter.

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      BTW, the IMF is an international institution, just like the UN. Even Russia and China are part of it. You need to stop being tribal and think about the bigger picture. The leaders that you chose made this happen.

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    When Mugabe gained power in 1981 – Zimbabwe had no foreign debts to speak off. He then started programmes aimed at upgrading of education supported substantially by grant funding – same with medical services. However, Mugabe’s government also went on a borrowing spree – supported largely by the agricultural production – but instead of spending the borrowed money on infrastructure development – the money found its way largely into the pockets of individuals – who stole unbelievable amounts of money. Suddenly Mugabe and his inner circle were billionaires.

    When the lending sources dried up – Mugabe and co went for the next source of income available and that was the agricultural sector. Gone was the means to repay loans. However, when the assts of Mugabe and his inner circle was frozen in 2002 – Mugabe had about a week notice of what was about the happen and there was a scramble to transfer money to Malaysia. Fixed investments could not be touched – but Mugabe nevertheless on his own transferred allegedly more than $1 billion to Malaysia within that week. The rest of the loot is still held in frozen personal accounts of the elite.

    Now there is the diamond revenue that nobody seems to know where it has gone. It is also held largely in private bank accounts outside of the country.

    If the Zimbabwe elite return the stolen loot – it is likely to pay back more than 50% of the loan debt with ease – but that would never happen.

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      NANSI LENDODA 7 years ago

      @Michael how could Rhodesia have had foreign debts while it was under sanctions by then. Its economy cared for a few white people in Rhodesia. In 1980 the present Government had to borrow so as to cater for all Zimbabweans who lived in it black and white and not forgetting the Idians

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        So you think all the money Mugabe borrowed actually made it’s way to the people? If so then let’s see his bank account, as well as his fellow thieves. In other countries, politicians much publicly disclose all of their wealth to the public. It’s called transparency. It reassures people. If Mugabe cared about the people he would allow a forensic audit of the country’s debt, as well as a transparent land audit as well. And dont forget about accounting for the diamond money too! But none of it will happen, because he has too much to hide.