A diplomat at the American Embassy in Harare says U.S. sanctions are not a factor in Zimbabwe’s relations with multi-lateral lenders such as the International Monetary Fund (IMF) and the World Bank.
“There never has been any connection between U.S. sanctions and Zimbabwe’s relationship with the IMF,” James Garry, Economic Officer at the U.S. Embassy, told journalists at a roundtable discussion on Wednesday.
Garry explained that even if the Zimbabwe Democracy and Economic Recovery Act (ZDERA) was to be repealed today, Zimbabwe would still not be able to access loans because of its arrears with the multi-lateral lenders. Arrears made Zimbabwe ineligible for loans even before ZDERA became law in December 2001.
“There is a widespread misapprehension that the U.S. has some kind of veto at the IMF. It is not true. The IMF, for example, makes most of its decisions by majority vote, and voting strength is assigned essentially according to the country’s financial interest in the Fund. The U.S. has just 16.77 percent of the voting power at the IMF, and it is not in a position to veto IMF decisions,” said Garry.
On February 19, the Executive Board of the International Monetary Fund announced its decision to restore Zimbabwe’s voting and related rights, and its eligibility to use resources from the IMF’s General Resources Account (GRA), following a request from Zimbabwe’s Finance Minister Tendai Biti.
Notwithstanding the restoration of the eligibility to use GRA resources, said the IMF, Zimbabwe will not be able to use resources from the GRA or the Poverty Reduction and Growth Trust (PRGT) until it fully settles its arrears to the PRGT (SDR 89.4 million or about US$140 million).
Garry said the restoration of Zimbabwe’s IMF voting rights announced by the IMF last week opens the door to closer cooperation with the IMF, noting that Zimbabwe must take further steps before it can borrow again from the IMF. He said Zimbabwe’s arrears with other multilateral lenders such as the African Development Bank and the World Bank also need to be addressed.
In a February 19 press release, the IMF said access to IMF lending resources by Zimbabwe is also subject to IMF policies on the use of such resources, including a track record of sound policies and the resolution of arrears to official creditors, which would require donor support. The multilateral lender said “any remaining issues on further normalization of relations will be addressed over time.”
