IMF extends Zim SMP

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THE International Monetary Fund (IMF) has extended Zimbabwe’s Staff-Monitored Programme as the country seeks to resolve its huge external debt.

Bernard Mpofu,Acting Business Editor

Last June, IMF managing director approved a Staff-Monitored Programme (SMP) for Zimbabwe, covering the period April-December 2013. An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic programme.

SMPs do not entail financial assistance or endorsement by the IMF Executive Board. This programme was Zimbabwe’s first IMF agreement in more than a decade.

“At the authorities’ request, IMF Management has approved a six-month extension of Zimbabwe’s Staff-Monitored Programme (SMP) to allow time for the national authorities to strengthen their policies and deliver on outstanding commitments under the programme,” the IMF said recently.

“Under the extension, an IMF staff team will visit Harare in March 2014 to assess performance, combining the first and second reviews under the SMP. During the March 2014 visit, the targets for a third review with an assessment date end-June 2014 will be set.”

The development comes nearly two months after a visiting team from the Bretton Woods institution raised concerns over the country’s growing civil service wage bill. According to government documents seen by the NewsDay, the IMF last year queried government over the ballooning civil service wage bill after it emerged over 10 000 civil servants had been employed between March and September 2013 in defiance of a standing policy to freeze new jobs in the public service.

Official figures show that the public sector wage bill accounts for 75% of total revenue, crowding out capital projects. At individual level, the civil service remuneration structure has remained modest, with monthly payments of under $316 at the entry levels. Professionals in education, health and administration were being remunerated at monthly average levels of around $465.

Zimbabwe hosted an IMF mission between November 6-20 last year to review progress on the implementation of the SMP as well as discuss macroeconomic projections in preparation for the 2014 National Budget presented last month. Zimbabwe has an estimated external debt of over $6 billion including arrears.

In 2012, 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 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.

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