UN, IMF back Zim’s economic reforms

Source: UN, IMF back Zim’s economic reforms | Sunday Mail

Kuda Bwititi
Chief Reporter

THE United Nations has given thumbs up to Government’s economic reform programme saying, although painful, the measures are necessary to realign the economy for sustainable growth.

UN also says it will up its support to Zimbabwe’s drought relief programme and rebuilding infrastructure damaged by Cyclone Idai to minimise the impact of the austerity measures on the poorest citizens.

This comes as the International Monetary Fund (IMF) has also commended progress made by Zimbabwe in implementing its reforms, while noting that the country faces “deep macroeconomic imbalances.”

Under the Transitional Stabilisation Plan (TSP), Zimbabwe is undergoing fiscal and monetary reforms that are earmarked at instilling the right economic fundamentals to push-start the economy for prosperity.

Speaking to The Sunday Mail, UN resident coordinator Mr Bishow Parajuli said the current economic reforms were “essential.”

”This economic reform which is taking place is essential, the steps being taken for economic reform are what is required,” he said.

“Given the economic challenge the country has, it is an extremely huge burden for Zimbabwe and we are working extremely hard to help Zimbabwe.”

Mr Parajuli described the current price distortions in goods and services as transient.

He noted that the current economic challenges had been worsened by drought and Cyclone Idai and, in that regard, UN would increase its humanitarian support to the country.

“If you look at the food crop assessment, it gives a complete understanding of where we stand so far,” said Mr Parajuli.

“In the urban areas alone, I think there are about 1,2 million to 1,5 million that need food assistance as a result of the drought. More rural people also need assistance; there are more than 3 million.

“Then on cyclone Idai, there was huge infrastructure damage that needs considerable support in rebuilding. In totality, there is huge fiscal burden to rebuild.”

On Friday, the IMF also acknowledged progress made in realigning the economy on both the monetary and fiscal fronts.

The IMF also extended its Staff Monitored Programme to Zimbabwe for another year to March 2020.

The Bretton Woods institution noted that while the country was facing macroeconomic imbalances; “fiscal policy has been significantly tightened since September 2018.

“Broader structural reforms are underway. The government has approved the reform framework for 43 state enterprises and parastatals, aimed at making them fully accountable, transparent, and economically viable; complementing Government’s broader efforts in promoting economic growth and improving service delivery.”

The IMF also commended Zimbabwe for “an aggressive fight against corruption” as well as legal reforms that include the drive to repeal of the Public Order and Safety Act (POSA) and Access to Information and Protection of Privacy Act (AIPPA), and modifications to the Police Act and Citizenship Act.

With regards to the monetary front, the IMF commended the introduction of the interbank foreign exchange market as a step in the right direction.

It said as a result of the drought and cyclone, real Gross Domestic Product growth is projected to be negative this year, but will rebound next year.

Zimbabwe has agreed to work with the IMF in implementing its economic and political reforms under the SMP from May 15 to March 15 next year as part of President Mnangagwa’s administration’s commitment to reform.