ZIMBABWE may soon adopt the International Monetary Fund (IMF) staff-monitored programme (SMP) as the country steps up efforts to tackle its huge external debt, Finance minister Tendai Biti has said.
REPORT BY BERNARD MPOFU
The SMP would help monitor the country’s economic reforms and policies, and facilitate arrears clearance with official creditors.
This comes after the chief secretary to the President and Cabinet Misheck Sibanda last month submitted the final documents to multilateral financial institutions, paving the way for the resolution of the country’s huge debt overhang.
Zimbabwe, which is currently saddled with a $10,7 billion external debt, last year adopted a debt settlement plan in a bid to re-engage the Bretton Woods institutions.
Presenting the Treasury State of the Economy Report for April, Biti on Thursday said the government may soon sign relevant documents with the IMF, expressing its commitment to tackling the debt issue.
“Pursuant to chief secretary to the President and Cabinet Misheck Sibanda writing to the IMF last month advising the same that Zimbabwe is very interested in the staff-monitored programme, I am pleased to say that we are on the verge of signing documents that will pave way for an SMP in Zimbabwe,” Biti said.
“The SMP is a key component of Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy (ZAADS ) and Zimbabwe Accelerated Re-engagement Economic Programme, ZAREP.
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“Hopefully, we should be able to sign the relevant documents in the next few days, which will enable the SMP to commence in Zimbabwe. This is key because without this, we cannot resolve the Zimbabwe debt problem of almost 110% of gross domestic product. Once we succeed in the SMP, it will allow the international community to forgive and cancel some of our debt.”
The non-payment and accumulation of debt began in 1999 due to balance of payment constraints with a large proportion of the debt, according to government estimates, being inherited after Independence in 1980.
The country’s economic growth rate had since the adoption of multiple currencies in 2009 been trending upwards only to begin slowing down this year. Biti said the country required a $4 billion stimulus package in the coming year to re-activate economic growth that had slowed down in recent times.
Last October, the IMF eased restrictions on technical assistance to Zimbabwe, opening the way for an IMF staff-monitored economic programme. The move marked a major step towards normalising relations with Zimbabwe.
The re-engagement meeting also came after a joint IMF/World Bank visit to Zimbabwe last June as a follow-up to meetings in Tunisia and Washington DC where consensus was built among all creditors and other stakeholders over the process of resolving the country’s external debt.
