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Harare, Zimbabwe
The fund announced yesterday that it had removed “remedial measures” against Zimbabwe after the country cleared $108m worth of overdue debts with the fund, stretching back 15 years.
As a result, a declaration scolding Zimbabwe for “noncooperation” with the fund has been lifted. This means the country will regain full access to technical assistance. It will also be put back on the list of countries eligible to access a fund dedicated to poverty reduction and growth in low-income countries.
It was that same fund, the Poverty Reduction and Growth Trust, that Zimbabwe had been in arrears with since February 2001, stacking up $107.9m worth of late payments.
However, the IMF stated that “notwithstanding the settlement” of arrears, Zimbabwe will not yet be able to access any new IMF financing from the PRGT or otherwise.
“Consideration of any future IMF financing would also require Zimbabwe to comply with other applicable IMF policies,” it continued.
These include fiscal and structural overhauls to restore public financial sustainability and foster private sector development, and the clearance of arrears with other creditors.
Zimbabwe still owes substantial repayments to the World Bank and the African Development Bank, amounting to $1.7bn.
Its finance minister, Patrick Chinamasa, said earlier this year that it could not clear the arrears until a new financing plan for Zimbabwe could be put in place.
Aside from a period of strong growth following its recovery from the financial crisis, Zimbabwe’s economy has been in ill-health since 2000 when a controversial land reform programme, human rights abuses and violence saw foreign aid being cut off.
Its problems have been exacerbated over the past year by one of the worst droughts the country has seen in decades. Meanwhile, an acute cash shortage has forced the country to introduce its own version of the US dollar.
Many Zimbabweans were bemused by the fact the country has been able to suddenly repay $108m when many public workers’ salaries have been delayed for months, leading to protests.
The IMF has called on Zimbabwe to clear its arrears and reengage with the international community as a matter of urgency.
