ive board on Wednesday resolved not to restore Zimbabwe’s voting rights and to maintain a freeze on loans to the crisis-hit southern African nation.
In a statement released after a meeting that among other issues deliberated the status of relations with Zimbabwe, the board said it had decided “not to restore Zimbabwe‘s voting and related rights and not to terminate its ineligibility to use the general resources of the Fund at this juncture.”
Finance Minister Herbert Murerwa, who together with Zimbabwe central bank governor Gideon Gono was in Washington to plead Harare’s case before the IMF, had hoped to persuade the Fund to release badly needed financial support especially because the southern African country had cleared arrears it owed under the IMF’s critical General Resources Account (GRA).
Murerwa had told reporters in Harare before leaving for Washington that he was going to ask the IMF board to resume balance-of-payments support cut six years ago after differences between the global lender and President Robert Mugabe’s government over fiscal policy and other governance issues.
But the IMF board noted that despite Zimbabwe’s payment of the GRA arrears, the economy was still in severe crisis that required urgent and wide-ranging reforms before normalcy could be restored and which would also allow for assistance from the Fund.
It said: “There is still need for urgent implementation of a comprehensive policy package comprising several mutually reinforcing actions in the area of macro-economic stabilisation and structural reforms.”
Zimbabwe was almost chucked out of the IMF last year for failing to meet its obligations to the multilateral financial institution but it retained membership after making a surprise US$120 million last September.
Subsequent payments cleared off Harare’s arrears under the GRA but left it owing about US$119 million under the Fund’s Poverty Reduction and Growth Facility-Exogenous Shocks facility. Debts owed under the poverty reduction facility do not lead to compulsory expulsion. – ZimOnline
Post published in: Economy