A team from the International Monetary Fund team leading efforts to re-engage Zimbabwe said on Wednesday it will “assess” whether the country has adhered to agreed reforms aimed at normalising its relations with the lender.
“We are going to look whether the policies that have been implemented in the last five months have been broadly consistent with what we agreed,” said Domenico Fanizza, IMF’s head of mission to Harare, to a Zimbabwe parliamentary committee on finance and economic development.
Fanizza said the global lender has been giving Zimbabwe technical support and it will want to check whether reforms to regain the confidence of multi-lateral institutions have been adhered to.
“It is an essential step in building the momentum in the process of re-engaging with the international financial community, and in particular the international financial institutions,” he said.
“Once that (has been done) it means we can think about the financial re-engagement of the IMF in the country and also Zimbabwe can think of requesting rescheduling of the outstanding bilateral debt…,” he added.
The IMF resumed its programme with Zimbabwe in 2013, shortly before crunch elections extended President Robert Mugabe‘s 30-plus-year rule.
Zimbabwe was stripped of its voting rights by the IMF in 2003 and nearly got expelled, a rare move for the Washington-based institution.
But in 2012, the IMF relaxed its restrictions on providing consulting support to Zimbabwe as the country moved toward constitutional reforms and showed improvement in economic policy cooperation with the fund.
The IMF has urged among other reforms, the reviewing of the indigenisation policies — which require local majority ownership of companies. The policies have scared off much needed foreign investment.
Fanizza said that the cash-strapped country needs to clear its outstanding arrears with the IMF and World Bank if it is to access the much needed loans.
Zimbabwe’s arrears to the IMF stand at $152 million and $1.2 billion to the World Bank, Fanizza said.
Zimbabwe’s economy has been on a downturn for over a decade with shortages of cash and industries operating below capacity, or shutting down outright. AFP
