An International Monetary Fund’s (IMF) economic supervised reform programme on Zimbabwe has been successful, but the country needs to get a better plan to transform the economy, the global lender has said.
BY VICTORIA MTOMBA
IMF head of delegation to Zimbabwe Domenico Fanizza told a parliamentary committee on Budget and Finance that the country needs to push for reform and engagement to improve the economic situation in the country.
“By and large the Staff Monitored Programme (SMP) was successful, not in transforming the economy of the nation. It could not do it because that is not what it wanted to do. It wanted to create a process that leads us to tackle the underlying issues which is where we want to get now,” Fanizza said.
The IMF team is in the country on a final review of the SMP. The SMP is a successor plan to the initial reform programme that was approved by IMF in June 2013. It was supposed to end in December 2013, but was extended by another six months to allow Zimbabwe to meet set targets. The current 15 months’ plan was approved in October 2014.
Fanizza said once “we concluded successfully the SMP; we have to make the case with particularly with stakeholders (Zimbabwe’s creditors) that you have made some progress on economic reform and you have prepared an ambitious reform programme”.
“In order to do that we still need to build consensus among creditors. It’s not my decision it’s an IMF decision. We go to the board in May to build consensus from the board to get light to move ahead,” Fanizza said.
He said there was need to build consensus and the next step is preparing a fully- fledged reform programme as a preliminary to requesting rescheduling of the external debt.
Fanizza was responding to a question by MDC-T legislator Eddie Cross on the IMF’s views on the SMP and if it was happy with the way government has met the targets.
Fanizza said the SMP was an initial step not a complete or ambitious programme. He said its objective was to improve the macroeconomic stability and to ensure that the country can implement some reforms.
“It wanted to create the process that would lead us to address underlying issues. Some of the policies on the benchmarks they are your policies and I cannot say they can be done this way. It’s up to Zimbabwe to decide what they want. What we could say is make it clear,” he said.
Fanizza was commenting on the Indigenisation policy.
On the liquidity crisis in the market, Fanizza said Zimbabwe does not have sufficient inflows and circulation was a function of the multicurrency system.
Some of the benchmarks under the third review include submitting to Cabinet amendments to the Public Finance Management Act to strengthen Treasury’s financial oversight of State-owned enterprises and local authorities and amendments to the Procurement Act to tighten the public procurement framework and make it more efficient and transparent.
Zimbabwe also promised to produce a guide on the Indigenisation and Economic Empowerment legislation on the Zimbabwe Investment Authority website.
Zimbabwe had by last year met some of the benchmarks for the third review such as developing draft principles of the ZAMCO Bill for submission to Cabinet and amendments to the Labour Relations Act.