GNU falls behind on IMF repayments

mutambara_mugabe_tsvangiraiHARARE Zimbabwe has reneged on a promise to meet quarterly payments aimed at clearing its arrears to the International Monetary Fund (IMF), the Fund announced last week. (Pictured: Mutambara, Mugabe and Tsvangirai)

Harares new coalition government pledged in April to pay US$100 000 every three months starting in July towards clearing its arrears to the Bretton Woods institution which then stood at about US$133 million. No such payments have been received to date, the Fund said. The country has made two payments to the Bretton Woods institution amounting to about US$690 000 since the last review by the IMF board in January.

Zimbabwe has been in continuous arrears to the IMF since February 2001 and is the only case of protracted arrears to the Poverty Reduction and Growth Facility-Exogenous Shock Facility (PRGF-ESF) Trust. The remedial measures that have been imposed on Zimbabwe with respect to these arrears are the suspension of technical assistance (now partially lifted); the removal of Zimbabwe from the list of PRGF-ESF-eligible countries. The IMF executive board in May lifted the suspension of technical assistance to Zimbabwe in targeted areas.

The IMF said it would offer technical assistance in the areas of taxpolicy and administration; payments systems; lender-of-last-resort operations and banking supervision; and central banking governance and accounting. The executive board would review this decision at the time of the next review of Zimbabwes overdue financial obligations set for next month. In taking the decision to lift the suspension of technical assistance to Zimbabwe, the IMF said at the time that it had taken into account the significant improvement in the countrys cooperation on economic policies to address its arrears problems and severe capacity constraints in the IMFs core areas of expertise that represent a major risk to the implementation of the governments macroeconomic stabilisation programme.

The decision to offer technical assistance also followed consultations after Prime Minister Morgan Tsvangirai took office in February in a unity government with long-time foe President Robert Mugabe, whose government was shunned by the international community and narrowly averted expulsion from the IMF over arrears. Tsvangirai has made a priority of trying to restore ties with international lenders and the IMF sent a mission to Zimbabwe just one month after he took office. The IMF mission was the first to Zimbabwe since 2006, when Mugabe’s government narrowly averted expulsion from the body over arrears. The fund has long criticised Mugabe’s economic policies but had praise for the efforts of the new unity government. At least three IMF technical missions have visited Zimbabwe since May to assist the country improve central bank governance and restore confidence in the banking sector.

Post published in: Mining

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