IMF 2nd SMP review next month

via IMF 2nd SMP review next month – NewsDay Zimbabwe July 23, 2015

THE International Monetary Fund (IMF) mission will undertake the review of the second supervised economic reform programme on Zimbabwe next month amid indications the country has made progress under the plan.


Zimbabwe is under IMF’s Staff Monitored Programme (SMP), an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic programme.
This is the second SMP which began in October 2014 and runs up to December this year.

IMF resident representative in Zimbabwe Christian Beddies told NewsDay that the country made progress on the SMP under the first review held in March.

“Preliminary information indicates that the authorities remain on track in the implementation of the SMP. The fund mission will undertake the second review of the staff monitored Programme from August 31 to September 11, 2015.This is a review of progress that the authorities have made under the SMP (October 2014-December 2015),” Beddies said.

Zimbabwe is expected under the programme to stabilise the financial services sector as well as improving confidence by dealing with weak banks. The central bank promised IMF that it would have dealt with three troubled banks — AfrAsia, MetBank and Tetrad — by June 30. In an update early this month, Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said MetBank had improved and its bank’s core capital position had increased to $31 million as at March 31 2015, above the minimum core capital requirements of $25 million.
Mangudya said RBZ had appointed the Deposit Protection Corporation as Tetrad’s provisional judicial manager to oversee the day-to-day running of the bank.

AfrAsia Bank Zimbabwe surrendered its operating licence in January.
Commenting on the performance of the economy during the first half of the year, Beddies said the economic situation remains difficult with the agricultural sector underperforming due to adverse weather conditions.

“Mitigating factors include better performance in other sectors, most notably gold. One of the key tasks of the upcoming mission will be to reassess macroeconomic conditions and if need be revisit growth forecasts,” Beddies said.

The SMP was approved in October 2014 and it is a 15 month programme that will help Zimbabwe normalise its relationship with some of its creditors.

The programme will strengthen Zimbabwe’s external position as a prerequisite towards debt clearance and normalising relations with creditors and debt servicing.

Beddies said the strategy on debt clearance remains work in progress and the RBZ, Treasury, the African Development Bank, IMF and World Bank are working on the issue. The strong performance under the SMP would also improve Zimbabwe’s capacity for repayment and demonstrate that it can implement reforms that could justify a fund financial management to address the country’s problems.
Zimbabwe owes various creditors including the IMF, World Bank, Paris Club and others close over $10 billion in arrears.