ZIMBABWE has missed out on a US$500 million debt relief granted by the International Monetary Fund (IMF) to 25 poor countries to enable them to focus their financial resources towards fighting the coronavirus pandemic.
— BY VENERANDA LANGA
The southern African country is classified as a developing nation, while IMF granted the relief to less-developed nations, with beneficiaries including Afghanistan, Burkina Faso, Central African Republic, Chad, Comoros, the Democratic Republic of Congo, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.
Underdeveloped countries are defined as those with a less developed industrial base and a low human development index relative to other countries.
Zimbabwe has been unable to get funding from multilateral lenders since defaulting on its debt in 1999, and has instead, relied on the African Export and Import Bank for mineral-backed loans.
It has arrears of around US$2,2 billion with the World Bank, the African Development Bank and European Investment Bank.
The IMF recently released a statement which warned that COVID-19 will adversely affect Zimbabwe’s ailing economy.
“Zimbabwe is experiencing an economic and humanitarian crisis. Macro-economic stability remains a challenge: the economy contracted sharply in 2019, amplified by climate shocks that have crippled agriculture and electricity generation; the newly-introduced Zimbabwe dollar has lost most of its value; inflation is very high; and international reserves are very low,” the IMF said.
The IMF also said with another poor harvest expected in 2020, the economic growth rate is expected to hit zero percentage points.