JOHN Mangudya will attend his first annual meetings of the International Monetary Fund (IMF) and World Bank Group in Washington this week since taking over the reins as Reserve Bank of Zimbabwe (RBZ) governor in May.
CHIEF BUSINESS REPORTER
The meetings run from October 10 to 12.
Finance minister Patrick Chinamasa will lead the Zimbabwean delegation. Chinamasa and Mangudya are members of the board of governors, the highest decision-making body of the IMF.
All powers of the IMF are vested in the board of governors. The board of governors may delegate to the Executive Board all except certain reserved powers.
At the World Bank Group Chinamasa is the governor and his alternate is Treasury permanent secretary Willard Manungo. The trip to Washington comes on the backdrop of Zimbabwe meeting all the benchmarks under a supervised economic reform plan, the Staff Monitored Programme (SMP).
The government and the IMF Mission to Zimbabwe signed a letter of intent for a successor SMP programme that would run from October to end of December 2015.
The plan has to be approved by IMF management.
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Under the successor SMP, government promised to eliminate fiscal deficits to send a strong signal that Zimbabwe government intends to live within its means, IMF head of mission to Zimbabwe Domenico Fanizza said.
In the first half of 2014, Zimbabwe had a budget deficit of $218 million as expenditure soared more than revenue generated further pushing pressure on the ailing economy.
Chinamasa attributed the deficit to additional employment costs and loan repayments.
Under the successor SMP, Zimbabwe promised to restore confidence and stability in the financial sector through the uptake of the non-performing loans on the banks balance sheets and amendments to the Banking Act.
Zimbabwe also promised to make clarifications on the indigenisation law and allay the fears of investors. The move, Fanizza said, would be key to gather support from the international community.
Zimbabwe also promised IMF that it would address the country’s debt challenges by stepping up re-engagement with all the creditors.
Last year, IMF approved an SMP — an informal agreement between country authorities and the fund staff to monitor the implementation of the authorities’ economic programmes — following intensive lobbying by the inclusive government as part of its re-engagement with the global lender.
The SMP focussed 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.
