IMF team conducts first review of Zimbabwe successor SMP

via IMF team conducts first review of Zimbabwe successor SMP – Xinhua | 26 February 2015

HARARE — An International Monetary Fund (IMF) team is on a two-week mission to Zimbabwe to conduct the first review of the successor Staff Monitored Program, an official said Wednesday.

IMF resident representative Christian Beddies told Xinhua that the team will hold discussions with government ministers, the Reserve Bank of Zimbabwe and the private sector, among other key stakeholders.

The five-member team arrived in Zimbabwe on Feb. 24 and will conclude its visit on March 11, Beddies said.

“The team started work this morning and today met finance minister Patrick Chinamasa, chief secretary to the president and cabinet Misheck Sibanda and Reserve Bank Governor John Mangudya,” Beddies said.

Zimbabwe entered into a 15-month successor SMP with the IMF last October after the expiry of the initial one-year SMP in June 2014.

The Zimbabwe government requested for the successor SMP, due to run until December this year, to bolster economic reforms it is undertaking to boost economic recovery.

A second review of the successor SMP will be conducted in September.

At the conclusion of the initial SMP last June, the IMF expressed satisfaction with progress that Zimbabwe had made in strengthening economic reforms.

Under the successor SMP, Zimbabwe has committed to undertaking further economic reforms by consolidating its fiscal position so that more resources are allocated towards infrastructure and social spending, improve external position, clarify the indigenization program, restore confidence in the financial services sector and mobilize international support to address the country’s huge external debt of 7 billion U.S. dollars.

While the SMP does not entail financial assistance or endorsement by the IMF, it however represents Zimbabwe’s first IMF agreement in more than a decade while its successful implementation would be an important stepping stone for Zimbabwe to re-engage with the international community.

Under the SMP, the IMF undertakes to assist Zimbabwe put its public finances on a sustainable course while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities and restructuring the central bank.

The IMF, World Bank and other multilateral financial institutions have not been lending to Zimbabwe since 2000 due to arrears.

The country owes the World Bank 1 billion U.S. dollars and the IMF 142 million dollars, among other creditors.