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IMF eases restrictions


THE International Monetary Fund (IMF) has relaxed most restrictions on technical assistance to Zimbabwe opening the way for future staff-monitored programmes and full normalisation of relations, the multilateral institution has said.
Mernat Mafirakurewa  Acting Business Editor

The IMF executive board will also resume IMF technical assistance in new areas to support  the country’s formulation and implementation of a comprehensive adjustment and structural reform programme to be monitored by its staff.

Current and new areas for IMF technical assistance to Zimbabwe were in tax policy and administration, public financial management and expenditure policy, financial sector and central bank reforms.

In addition, the IMF was assisting in monetary and exchange policies, macroeconomic statistics, anti-money laundering and combating the financing of terrorism; and any other area that would support the formulation and implementation of a comprehensive adjustment and reform programme that can be monitored by the staff.

In a statement on Tuesday IMF said: “The decision, taken on a lapse-of-time basis on October 23, 2012, opens the way for Zimbabwe to agree on an economic programme that would be monitored by IMF staff. Such a staff-monitored programme (SMP) would mark another significant step toward normalisation of Zimbabwe’s relations with the IMF.”

The institution added: “In taking this decision to relax restrictions on Zimbabwe to the full extent necessary to allow for an SMP, the executive board took into account a significant improvement in Zimbabwe’s cooperation on economic policies, the authorities’ efforts and renewed commitment to address its arrears problems, and Zimbabwe’s severe capacity constraints in the IMF’s core areas of expertise that represent a major risk to the implementation of the government’s macroeconomic stabilisation programme.”

As a result, the IMF executive board on June 13, 2002, adopted a declaration of non-cooperation regarding Zimbabwe’s overdue financial obligations and suspended its provision of technical assistance to the country.  The declaration of non-cooperation is part of remedial measures taken to encourage member countries that fail to settle overdue financial obligations to the IMF to undertake the economic policies that would enable them to update their financial obligations to the institution.

Zimbabwe was declared ineligible to use IMF general resources and removed from the list of countries eligible to borrow resources under the Poverty Reduction and Growth Facility (PRGF on September 24, 2001, after defaulting in mid-February the same year. As of June 12, 2002, Zimbabwe’s overdue obligations totalled $132 million including about $74 million to the IMF’s General Department and $58 million towards the PRGF Trust.

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