Source: IMF gives Zim reforms thumbs-up | The Herald April 23, 2016
Lloyd Gumbo Senior Reporter—
The International Monetary Fund mission to Zimbabwe is satisfied with the pace of economic reforms being carried out by Zimbabwe, a Government minister has revealed, saying the development could lead to be opening of new lines of credit to finance strategic sectors such as agriculture.Finance and Economic Development Minister Patrick Chinamasa said this at a Press conference on Zimbabwe’s preparedness to host the African Capacity Building Foundation 25th anniversary in the first week of May in Harare.
Zimbabwe was under a 15-month IMF Staff Monitored Programme to December last year during which the Bretton Woods institution wanted to see set targets in economic management met.
“The IMF mission team was in the country in February to March to assess whether we had met our targets — structural and quantitative — for end of December as well as to conduct Article IV consultations,” said Minister Chinamasa.
“They came and did those assessments and consultations. Their report is very positive that we met our targets and that we are on course in terms of improving our macro-economic management.
“That is what is going to attract investors into the country, that we are sound managers of our economy. They gave us a clean bill of health with respect to targets that we had set for ourselves to meet at the end of December.”
Minister Chinamasa said the country had gone beyond the IMF mission’s expectations, particularly on activities outside its Staff Monitored Programme. These include evaluation for compensation of farms that Government compulsorily acquired from white farmers under the land reform programme and remapping of land ahead of the issuance of 99-year leases with provisions for collateral.
“As I have always hammered day in and day out, that is, any reforms we carry out are not for anybody, they are not to please anybody. These are for the interests of our country in order to be good, sound managers,” said Minister Chinamasa.
“The IMF board is going to sit on the 2nd of May (in a fortnight’s time) to receive the report of the mission, which is positive. It’s just to receive and not to review or anything else. It’s just to receive the report on the targets and Article IV consultations,” he said.
“We cannot envisage a situation where the board will query the mission with respect to their report. So we are quite optimistic that the report will be received well by the board,” said Minister Chinamasa.
He said thereafter, Government would start operationalising its debt clearance strategy. Zimbabwe owes the African Development Bank about $600 million, the World Bank over $1 billion and the International Monetary Fund about $120 million.
Minister Chinamasa said they expected the three creditors to consider Zimbabwe’s debt clearance strategy by November this year.
“Also, between now and then, we are going to work feverishly to come up with a new financing programme on the basis of which we hope, if we clear our arrears in tandem, as reciprocation, we should get new financing to support those sectors of our economy which we think, if supported, can have a transformative impact on our economic recovery,” Minister Chinamasa said.
“Primarily, we are looking at agriculture. We are also looking at private sector growth. We are now going to give impetus to parastatal reform and to build capacity for all that is done by officials from here (Ministry of Finance), and that capacity was built through the assistance of ACBF,” he said.
He said Treasury and the central bank were also developing a new country financing programme with the assistance of the IMF, the World Bank and the African Development Bank.
“We need to restore our economy to a level where it can pay its debts. Currently we are not paying. This country financing programme is to be able to finance those sectors in order for them to grow and build the country’s capacity to pay its debts both past and current,” said Minister Chinamasa.
The minister said there were positive economic developments happening in the country as alluded to by President Mugabe during his speech at the 36th Independence anniversary celebrations on Monday.
Minister Chinamasa said the current liquidity challenges facing the country were temporary, adding that Government had taken a deliberate move to ensure money was banked, including payments to farmers. He said this was applicable to tobacco farmers, those who will deliver their grain to the Grain Marketing Board and cotton farmers.
Minister Chinamasa implored the media to also focus on positive developments happening in the country instead of being obsessed with negativity.