IMF team set for Zim

via IMF team set for Zim – DailyNews Live 14 September 2014

HARARE – An International Monetary Fund (IMF) delegation is expected in Zimbabwe next week to assess the country’s progress on the staff monitored programme (SMP).

Finance minister Patrick Chinamasa told Parliament that the team would be in the country from September 17 to October 1, 2014.

“As for now, they (IMF) are reasonably happy with our performance and to demonstrate their satisfaction, they have now opened an office and accredited a representative with effect from July, after a decade long absence,” he said.

“So what we are going to discuss is to negotiate a successor staff monitored programme to take effect after the time of their visit and review,” he added.

Under SM — representing Zimbabwe’s first IMF engagement in more than a decade — the country is expected to implement a series of economic reforms.

The programme, initially set to run until December 2013, focuses on fiscal consolidation and strengthening public financial management, completing the structural reforms in the areas of tax administration and increasing transparency in collection of revenues, particularly in diamond mining.

It also seeks to enhance financial sector stability and reduce vulnerabilities and complete the Reserve Bank of Zimbabwe reforms, especially the restructuring of its balance sheet and strengthen the banking sector regulatory and supervisory framework.

Its successful implementation is a pre-condition for negotiating arrears clearance and debt relief and will also assist in reducing the country’s credit risk rating.

Chinamasa said in the meantime, government did not expect any bail out from international financiers.

“I do not think that there is any expectation. There is no expectation of anything… from the IMF, World Bank and AfDB. We are basically trying to normalise relations with them,” he said.

“We are a member of these organisations, but we are running arrears of debt. Until we sort out the debt problem, we will not be in a position where we can say we have amended our relations with those multi institutions.”

“We are doing these things for ourselves, for our economy and not for the IMF.

“We are doing this so that if we do them well, we can then engage and be able to enjoy our benefits as a member of the IMF, and therefore benefit from the Balance of Payments support (Bop),” he said.

“So, I want you to know that this staff monitored programme is ours and there are a lot of challenges.

“For instance, one of the objective is of the staff monitored programme is that we build up reserves. We are beginning to do it but it will take some time.”

“We are also looking into a variety of issues, basically to ensure that as we spend money, even in our difficult circumstances, we continue addressing social expenditure to education and to health.

Therefore, that becomes a very complex exercise to balance, but I think that overall, the IMF is broadly satisfied that we are doing a good job.”