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NewsDay

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IMF team in Zim

News
The International Monetary Fund (IMF) team is in the country for the routine Article IV consultations that deal with economic developments and policies of member countries. The team visits Zimbabwe every year in June to compile a report in collaboration with the government and other stakeholders. Secretary for Finance Willard Manungo on Monday told Bloomberg […]

The International Monetary Fund (IMF) team is in the country for the routine Article IV consultations that deal with economic developments and policies of member countries.

The team visits Zimbabwe every year in June to compile a report in collaboration with the government and other stakeholders.

Secretary for Finance Willard Manungo on Monday told Bloomberg news agency that a team from the Bretton Woods institute was expected in the country on Tuesday.

The team, according to reports, will be on a two-week mission where it will meet with the government, business and labour leaders to discuss and review the country’s economic policies.

“The team will be here for two weeks and during that time they would meet with Minister of Finance (Tendai Biti) and other key ministries,” Manungo said.

“The visit is part of the IMF’s Article IV consultations with member states.”

Last month, IMF advised the government to adopt austerity measures to prevent the public sector wage bill from crowding out critical government projects.

The multilateral lender said Treasury should adopt the measures to stimulate economic growth. In the Regional Economic Outlook on sub-Saharan Africa, IMF said the government should keep its wage bill, currently accounting for 70% of revenues, under check.

With no lines of credit in place and tight fiscal space, Zimbabwe has adopted a cash-budgeting system.

“In Zimbabwe, firm measures are needed to prevent the public sector wage bill from crowding out other priority outlays, and policy uncertainty needs to be reduced if non-mineral growth is to be sustained,” said the IMF in a report.

The multilateral financier said Zimbabwe’s large debt overhang also remained a serious impediment to medium-term fiscal and external sustainability.

The country’s debt is estimated at $9,1 billion. The 2010 Article IV said the medium term outlook was clouded by political uncertainties and unclear prospects for addressing structural bottlenecks.

“Short-term and medium term growth and poverty reduction prospects could be significantly improved through implementation of stronger policies.

“The authorities are building political consensus for implementing corrective policies,” the report said in part.