BY FIDELITY MHLANGA
An International Monetary Fund (IMF) team is in the country for the first review of a Staff-Monitored Programme (SMP) geared towards engendering reforms to restore Zimbabwe’s economic stability.
The fund recently approved SMP for the southern African country which is battling to implement much-needed reforms to balance its economy.
Responding to questions last week in Washington DC, the Bretton Woods Institution spokesperson Gerry Rice said by undertaking the SMP, it means the institution is engaging fully with Zimbabwe on policies and reforms with a view to engender macro and financial stability prior to extending financing.
“So, what are we advising the government to do, in terms of the reforms and how to address some of these issues that you’ve raised? It’s of course, with the IMF; first and foremost restore macro and financial stability, so we think that will require a fiscal adjustment, adoption of reforms to allow the effective functioning of market-based foreign exchange and debt markets, structural reforms, including to reform and privatise State-owned enterprises, enhance governance including in procurement and revenue administration, and generally improve the business environment,” Rice said.
“We also are advising important safeguards to protect the country’s most vulnerable people which, you know, were a big part of your question. So, we have an IMF team actually in Harare, as of September 5, we think they’ll be there until around the 17th, and that will be the first review of this SMP.”
Rice added that while Zimbabwe has cleared its areas with the IMF, it still needs to clear those with other international financial institutions.
“So what would Zimbabwe need to do to, you know, get financing from the IMF and others? Zimbabwe is in good standing with the IMF, okay, I’ve said that before here. They have cleared their arrears with the IMF, but for financing to be forthcoming from the Fund, they would need to clear their arrears also to other international financial institutions,” he said.
Arrears to the World Bank and African Development Bank loans total almost US$2 billion. The southern African nation has a total external debt of US$9 billion.
“We would need some financing assurances as we always do in our programmes from other official bilateral creditors, and what I just said and what you asked, agreeing on a coherent set of economic policies that we think would put the country back on the path of macro stability and lay the foundation for growth. So that’s the discussion that’s going to be at the heart of this staff visit that’s ongoing right now. And we’re trying to be supportive, we want to be supportive and we’re pushing in that direction.”