IMF to monitor Zim debt plan for another 6 months

via IMF to monitor Zim debt plan for another 6 months | SW Radio Africa by Nomalanga Moyo  January 13, 2014

The International Monetary Fund (IMF) will monitor Zimbabwe’s debt management scheme for another six months at the request of the ZANU PF government.

The scheme was scheduled to run from April to December last year, but has been extended to give ZANU PF time to implement the delayed budget and its Zim Asset economic programme, as SW Radio Africa reported last week.

“At the authorities’ request, IMF Management has approved a six-month extension of Zimbabwe’s Staff Monitored Program to allow time for the national authorities to strengthen their policies and deliver on outstanding commitments under the program,” the global lender said in a statement.

IMF monitors are expected to return to Zimbabwe in March to review the government’s performance and “during the visit, the targets for a third review with an assessment date end-June 2014 will be set,” the Fund said.

Following an earlier visit in November, the delegation raised concerns about Zimbabwe’s commitment to the debt programme, after it emerged that ZANU PF had defied the agreement and hired an extra 10,000 security personnel.

ZANU PF’s secretary for administration Didymus Mutasa however denied the allegations and challenged the IMF to produce evidence.

Under the staff monitored programme, Zimbabwe is required to implement sound economic policies that promote sustainable spending, protect investment, increase diamond revenue transparency, reduce financial sector vulnerabilities, and to restructure the central bank.

Although the scheme is voluntary and does not necessarily mean the IMF backs the country’s economic programme, it nevertheless represents a key step towards Zimbabwe’s re-engagement with international lenders.

The World Bank and the IMF suspended aid to Zimbabwe in 1999 over differences with the ZANU PF regime’s unsustainable economic policies. Zimbabwe currently owes the IMF $124 million. It fell into arrears in 2001, and was expelled from the Fund in 2005.

The World Bank, which is owed $1 billion, says Zimbabwe should devise a comprehensive arrears clearance plan with international lenders to qualify for fresh loans. The institution’s programmes in Zimbabwe are limited to humanitarian aid.