Will the IMF programme restore Zim to past glory?

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ZIMBABWE’S lost decade of economic meltdown, which ended in 2009,  has been blamed on a host of problems. For Zanu PF, economic sanctions imposed by the United States and the European Union have triggered this collapse.

By Victoria Mtomba

Prime Minister Morgan Tsvangirai-led MDC and other likeminded parties, however, contend that the country’s poor debt record as well as ill-informed economic  policies triggered this meltdown.

Zim IMF debt

Currently, saddled with a $10,7 billion external debt and an increasingly unsustainable internal debt, Zimbabwe’s future remains bleak unless the debt issue is addressed, analysts argue.

Reality has finally sunk on the shaky inclusive government that the country badly needs concessionary funds from international finance institutions despite vast natural resources. Zimbabwe has the second known largest platinum reserves after South Africa.

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.

Last week the International Monetary Fund (IMF) approved a staff-monitored programme on Zimbabwe paving way for re-engagement with the Bretton Woods institution.

This came after the government adopted the Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy (ZAADDS), a debt plan to deal with the country’s debt trap which has been blamed for disqualifying the Southern African country from accessing long-term capital.

The staff-monitored programme is an informal agreement between the IMF and authorities from a country to allow approved by the IMF to monitor the implementation of the authorities’ economic programme.
The approval is the first agreement that the country has made in more than a decade.

Noble the development may be, the IMF was, however, quick to point out that the programme does not entail assistance or endorsement by the IMF executive.

“IMF staff will remain engaged with the authorities to monitor progress in the implementation of their economic programme, and will continue providing targeted technical assistance in order to support Zimbabwe’s capacity-building efforts and its adjustment and reform programme,” the IMF said in a statement.

In an interview World Bank country manager Nginya Mungai Lenneiye said: “Arrears clearance is the main issue. We want to see if Zimbabwe can embark on the road to recovery and we are watching the ministry and where the economy is going.”

Zimbabwe’s economy began a growth trajectory in 2009 when the country introduced the multicurrency system, becoming one of the fastest growing economies in the world. The economy took off   at 5,4% in 2009, 9,6% in 2010, 10,6% in 2011 and 5,6% in 2012.

The inflation rate began at -7,7% in 2009, 2010 inflation was at 3%, 3,5% in 2011 and 2012 3,7.

The country managed to maintain inflation below its target of 5% in the past four years.

11 COMMENTS

  1. Zanu gurus are stealing diamonts from Chiadzwa but kana mari yashota kutreasury, they blame this on sanctions. Police bosses ar stealing 99% of money from roadblocks converting it 2 their own use, bt blame the treasury 4 not supporting them. Crying foul over sanctions is jst an excuse 2 loot.

    • Please don’t waste your time talking politics while others are enjoying their lives with money without talking politics. See how this Zimbabwean poor woman became a millionaire just by buying and selling accidented cars. Very interesting idea. Go to (ACCIDENTED CARS.COM) all words together, to see the methods and companies she was using to do that. (ACCIDENTED CARS.COM) all words together, a very simple idea but a very powerful one, Wake up Africans

  2. The Zimbabwe economic meltdown back dates to the 1984 parastatals collapse, remember ESAP, War vets pay outs?? In the 90s. The current Zim Debt is very miss leading Most of Zimbabwean Debt was in Zimbabwe dollars and to local banks and institutions that was wiped out with hyperinflation so this debt was really worse. It’s funny that the foreigners are the only ones who will ever see a penny of their debts. Locals will see zerooooooo of their money so much for indigenousation

    • U Please don’t waste your time talking politics while others are enjoying their lives with money without talking politics. See how this Zimbabwean poor woman became a millionaire just by buying and selling accidented cars. Very interesting idea. Go to (ACCIDENTED CARS.COM) all words together, to see the methods and companies she was using to do that. (ACCIDENTED CARS.COM) all words together, a very simple idea but a very powerful one, Wake up Africans

      • if it wasn’t for MDC -T which mooted most of recovery strategies, we would have sunk below sea level by now.

        • Musanyepe ana Tatenda name the recovery stategies that the mdc implemented.There is nothing that the mdc has formulated since they got into gvt,,the policy that stabilised this economy was dollarisation introduced in the February 2009 monetary policy before the inception of the inclusive gvt.Hezvo nhasi mdc has got the service delivery ministries but look no water,electricity.Gadzirisai tione zvamaiti hanzi tikango pinda mu gvt chete matambudziko ese apera,,ruling a country hakusi kudya mutakura ana mukoma.

  3. Essentially IMF debt governance is attempting to get out of a hole by digging; it has never worked for anybody, I don’t see why it will work for us? This is silly!

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