IMF engages State, stakeholders

Source: IMF engages State, stakeholders | The Herald June 23, 2016

Conrad Mwanawashe : Business Reporter

ZIMBABWE’S current economic situation is under spotlight as an International Monetary Fund mission is engaging Government and other stakeholders to chat the possible way forward. The mission started on June 15 and will end tomorrow. The mission’s coming could be seen as preparatory to the meetings of the boards of the IMF, the World Bank and African Development Bank in September which is expected to confirm the settlement of all outstanding payments tothe international finance institution. The September meeting will also discuss possible fresh support to Zimbabwe.

Responding to questions from The Herald Business, IMF resident representative in Zimbabwe Christian Beddies said the purpose of the mission is to discuss the current economic situation and possible way forward.

“Consultations are being held with all stakeholders. The mission also comes after the conclusion of the African Development Bank meetings and is an opportunity for stakeholders to continue the discussions to expedite the re-engagement agenda,” said Mr Beddies.

New mission chief, Ms Ana Lucía Coronel is leading the team which comprises of Mr Edgardo Ruggiero, senior economist (African Department), Mr Vimal Thakoor, economist (African Department) and Ms Haimanot Teferra, senior economist, (Strategy, Policy and Review Department).

The IMF mission also comes as Government is this week expected to finalise its agreement to repay $1,8 billion arrears to multilateral financial institutions which could mark Zimbabwe’s return to the international financial system.

For almost two decades, Zimbabwe has been ostracised by the international community and cut off from international funding. The isolation meant Zimbabwe could not access international capital. So far the country has made significant strides and stacked a huge claim for full re-engagement with international financiers.

The IMF board, seating at the beginning of May, approved the country’s Staff Monitored Programme and Article IV consultations laying a solid foundation for re-engagement. Zimbabwe met all the quantitative targets for end-December 2015 and these included the recapitalisation of the Reserve Bank of Zimbabwe through the Debt Assumption Act, amendment of the Reserve Bank and Banking Acts and the establishment of the Zimbabwe Asset Management Corporation.

The country also amended the Labour Act, instituted reforms to the fiscal regime for the mining sector and developed a strategy to reduce the public service wage bill by 2019. The re-engagement process includes the clearance of the $1,8 billion arrears to multilateral creditors, expected to be concluded this week, a fund arrangement and debt treatment under the Paris Club.