THE International Monetary Fund (IMF) says Zimbabwe’s performance has been satisfactory under the supervised economic reform plan, Staff-Monitored Programme (SMP).
In June last year, IMF agreed to an SMP — an informal agreement between country authorities and the IMF staff to monitor the implementation of the authorities’ economic programme — to help the country out of the woods.
The SMP focuses 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.
In a statement yesterday, IMF said the “Zimbabwean authorities’ performance under the SMP has been broadly satisfactory and the authorities have taken corrective measures to ensure a track record of policy implementation going forward”.
“The SMP provided a useful anchor for Zimbabwe in a difficult election year. However, progress in implementing the programme was slowed by a long electoral process and a protracted post-election transition as well as an adverse external environment,” IMF said.
IMF, however, said a number of quantitative targets and structural benchmarks were not met.
IMF said the Zimbabwean authorities have began implementing policy measures aimed at addressing the 2014 fiscal gap, improving the quality of public expenditure, enhancing financial sector stability and moving forward delayed structural reform measures.
IMF said authorities have reiterated their continued commitment to the policies under SMP and enhanced engagement with their creditors and the international community.
Zimbabwe’s external and local debt is $9,9 billion that has accumulated over the years since 1980 when the country gained its independence.
The debt overhang has affected the country adversely as it cannot access loans from the international multilateral financiers.
“A successful conclusion of the third review could pave the way to a successor SMP, which the authorities have indicated they may request, to build on their achievements and support a stronger policy framework,” the IMF said.
“The IMF will continue to monitor progress in the implementation of Zimbabwe’s economic programmeand will continue to provide technical assistance to the country.”
In Article IV consultation framework, IMF said the medium term outlook under the baseline scenario for Zimbabwe was an average growth rate of 4% driven by the mining sector.
Article IV shows that the current account deficit was expected to improve but would remain high averaging 15% of Gross Domestic Product.
Finance and Economic Development minister Patrick Chinamasa said last week that he had received communication from the IMF “congratulating us on the little that we have done in the financial sector” and proposed reforms in the mining industry.
“The train is moving in the right direction,” he said imploring the government officials to speak with one voice on policy matters in apparent reference to the interpretation of the empowerment legislation.