Spring meetings: Chinamasa, Mangudya in Washington

via Spring meetings: Chinamasa, Mangudya in Washington – NewsDay Zimbabwe April 13, 2016

FINANCE minister Patrick Chinamasa and Reserve Bank of Zimbabwe governor John Mangudya are in Washington for the International Monetary Fund (IMF) and World Bank annual spring meetings.

BY VICTORIA MTOMBA

The spring meetings are attended by thousands of government officials, journalists, civil society organisations and participants from the academia and private sector.

The meetings began yesterday and end on Sunday.

During the spring meetings there would be side events on technical assistance for member countries.

Zimbabwe is normalising its relations with bilateral and multilateral creditors, and is set to pay its $1,8 billion debt to three preferred creditors — IMF, World Bank and the African Development Bank.

This came after the country’s proposed debt clearance plan was approved by creditors on the sidelines of the IMF/World Bank annual meetings in Lima, Peru in October.

The first step would be for government to use the bridge loan facility arranged by its debt advisors, the African Export-Import Bank, to clear its outstanding arrears to AfDB ($585 million) and African Development Fund ($16 million)

The second phase entailed using government’s Special Drawing Rights holdings to clear the $110 million owed to IMF.

Zimbabwe will seek a $1,1 billion medium term loan to pay the World Bank’s $1,1 billion debt.

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. Zimbabwe also owes the International Development Association (IDA), a World Bank unit, which helps the world’s poorest countries, $218 million.

The trip to Washington comes as the IMF board is scheduled to meet on May 2 to discuss issues including Zimbabwe’s medium term plan, after the country met all its benchmarks under the Staff Monitored Programme.

Earlier this year, the IMF head of delegation Domenico Fanizza said the meetings would be for consensus building and a new programme would come after the payment of arrears.

The repayment of the arrears is seen as a key step in unlocking fresh lines of credit to reboot the economy. The economy has been facing liquidity constraints owing to reduced export receipts.