A DELEGATION from the International Monetary Fund (IMF) is expected to land in Harare today to carry out an annual Article IV consultation and review progress on the fund’s supervised economic reform programme.
Last year, Zimbabwe and IMF signed a Staff-Monitored Programme (SMP) as the country moved to mend its relations with the global financial lender.
The SMP is an informal agreement between a country’s authorities and the IMF staff to monitor the implementation of economic programmes.
IMF will compile a report together with Treasury on the economic performance of the country through consultation. Article IV is a report on the state of the economy by IMF for member states.
The visit comes at a time when the economy is facing liquidity challenges with revenue flows to Treasury at their lowest ebb.
Several companies are reportedly failing to pay their dues to the Zimbabwe Revenue Authority with statistics from the tax collector indicating a $500 million shortfall in corporate taxes.
Finance minister Patrick Chinamasa recently said civil servants would receive salary increments next month when cashflow challenges are projected to have improved. The proposed salary hike would push the government wage bill from the current $13 million to $155 million per month.
The civil servants’ salary bill consumes more than 60% of the national budget.
For the period January to November 2013, government spent $2,4 billion towards recurrent expenditure, a trend that is against best practice of allocating 30% of total revenue to capital expenditure.
The SMP came after intensive lobbying by the inclusive government as part of its re-engagement with the global lender.
The SMP focusses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities and restructuring the central bank.