By Tatenda Dewa | Harare Bureau |
President Robert Mugabe’s government is this week likely to agree a repayment scheme with international financial institutions that might see Zimbabwe once again receiving aid from the International Monetary Fund (IMF) and World Bank (WB).
The IMF and WB cut aid to Zimbabwe almost two decades ago over accruing debts and poor governance, setting off an economic crisis that the country is still grappling with.
Africa Confidential (AC), a UK-based international research and news publication focusing on African affairs, reported that the IMF, WB and African Development Bank (AfDB) would meet in September to confirm a model for repayment of outstanding debts to the institutions.
The three financial establishments would also deliberate on renewing loans to Zimbabwe, which is currently facing a biting cash crunch and is struggling to pay the security sector and civil servants.
The latest developments are an extension of the WB and IMF meetings in September last year and another special convention at AfDB in Lusaka, Zambia, in late May this year.
The IMF visited Zimbabwe in mid-June this year for discussions on progress the country is making in its financial reforms.
Finance and Economic Development minister, Patrick Chinamasa, will at the end of June be leading a high-powered delegation to France for engagement with the Paris Club creditors on money Zimbabwe owes it.
After that, the team will visit London for a conference organised by AC.
The delegation will include John Mangudya, the Reserve Bank of Zimbabwe (RBZ) governor and Walter Chidhakwa, the Mining minister, among others.
President Mugabe, who is still telling off the west for allegedly seeking regime change in Zimbabwe, in early March revealed that Zimbabwe had from 2009 produced diamonds worth $15 billion in the Marange fields yet little of that amount had been accounted for.
Mining remains one of the major economic drivers in Zimbabwe through exports, amid talk of locally beneficiating minerals for maximum gain to the country.
Zimbabwe is expected to embark on a strict medium-term economic restructuring programme with the IMF that will include cutting the civil sector wage bill, the privatisation of public enterprises and improved accountability in government systems.
However, cuts in public expenditure may bring political challenges to the Mugabe government because they may lead to widespread disgruntlement as people lose jobs ahead of the 2018 general elections, analysts have pointed out.
The possibility of Zimbabwe’s re-engagement with the IMF and WB has already riled opposition parties.
The antagonistic People’s Democratic Party (PDP) and MDC-T recently issued a rare joint statement in which they accused the west of imposing solutions on Zimbabwe without taking into account worsening human rights and economic crises.
Meanwhile, the Zanu PF government received an extra ego boost when Chinese president, Xi Jinping, on Monday dispatched a special envoy to Zimbabwe to update Mugabe on investment deals agreed in 2014 and late 2015.
Little progress followed the agreements, but the Chinese deputy minister of Foreign Affairs, Zhang Ming, told Mugabe at his Mumhumutapa offices that his country would ensure implementation of the deals.
The envoy revealed that his government had completed the design of a new parliament structure and submitted the plans to Zimbabwe.
Ming also pledged a 20,000 metric tonne rice donation to Zimbabwe to mitigate the effects of the drought that has left almost three million people in urgent need of food aid.
“During President Xi’s visit to Harare, the two countries reached a series of common understanding on our cooperation. China decided to provide assistance to Zimbabwe for the construction of the new Parliament building of Zimbabwe.
“I reported to President Mugabe that China has already completed the design of the Parliament building and submitted three design plans to the Zimbabwe side and we are waiting for the confirmation from the Zimbabwean side for the early launch of this project,” said Ming. Nehanda Radio