An International Monetary Fund (IMF) mission will be in the country next week to discuss Zimbabwe’s current economic situation and solutions, the global lender’s local resident representative, Christian Beddies said on Tuesday.
Source: IMF, Zim seek solution to economic crisis – NewsDay Zimbabwe June 10, 2016
BY NDAMU SANDU
The mission runs from June 15 to 24.
Beddies said deputy director African department, Anne-Marie Gulde-Wolf will introduce the new mission chief to Zimbabwe, Ana Lucía Coronel. Other members of the mission include Edgardo Ruggiero and Vimal Thakoor (senior economist African Department) and Haimanot Teferra senior economist (strategy, policy and review department).
“The purpose of the mission is to discuss the current economic situation and possible ways forward. Consultations will be held with all stakeholders during the time of the mission,” Beddies said.
The mission comes as Zimbabwe is grappling with a cash crisis with no solution in sight. Some of the measures introduced to stem the crisis, such as the introduction of bond notes, have been met with resistance.
The limit on cash withdrawals and promotion of the use of plastic money have been another burden on depositors due to the high charges involved.
The visit comes after IMF’s deputy spokesperson in the communications department, William Murray said the global lender was assessing the implications of the measures on the economy, including the announced issuance of bond notes.
“…and we’ll engage in further discussions with the authorities with regard to their strategies. So, we’re going to have more discussions with the Zimbabweans on this strategy,” he said.
Beddies said the mission would give an opportunity for stakeholders to continue the discussions to expedite the re-engagement agenda after the conclusion of the African Development Bank (AfDB) annual meetings last month.
At last month’s AfDB annual meetings in Zambia, Zimbabwe presented terms sheets on how it would clear its arrears to the three preferred creditors — IMF, World Bank and AfDB. Zimbabwe owes the three creditors a combined $1,8 billion and clearance of the debt is the first step in extinguishing the country’s over $10 billion total debt.
According to an arrears and debt clearance plan presented on the sidelines of the IMF/World Bank annual meeting last year, Zimbabwe said it would get a bridge loan facility arranged by its debt advisers, the African Export-Import Bank, to clear its outstanding arrears to AfDB ($585 million) and African Development Fund ($16 million).
The bridge loan would be repaid using inflows from the Fragile State Facility of the AfDB.
The second phase entailed using government’s Special Drawing Rights holdings to clear the $110 million owed to IMF.
Zimbabwe said it would use a medium-to-long-term loan to clear its $1,1 billion arrears to the World Bank Group. It said the loan would have tenure of 10 to 15 years at an interest rate of 5-7% per annum. It would be repaid as a bullet payment, that is, the entire loan plus interest are payable at the end of the loan tenure.
Zimbabwe owes the International Bank of Reconstruction and Development (IBRD) $896 million. A unit of the World Bank Group, IBRD provides loans and assistance to middle income countries. It also owes the International Development Association (IDA) $218 million. IDA is a World Bank unit that helps the world’s poorest countries.