HARARE Zimbabwes economic recovery programme is unlikely to get full marks from a visiting International Monetary Fund (IMF) team amid allegations that the Bretton Woods institution is unhappy about policy slippages by Harares fragile coalition regime. (Pictured:
A six-member IMF team, which arrived in Zimbabwe last weekend, has been meeting government officials, bankers and business leaders and is expected to issue a statement on its findings at the end of this week. Treasury sources said that although Zimbabwes economic policies improved since 2009, the Fund was concerned about renewed political
instability and subsequent policy slippages that have intensified the countrys financial vulnerabilities.
They have raised concern about the deterioration in both the political and economic environment in Zimbabwe since their last visit three months ago. Of grave concern is the negative impact of the political feud between the GPA (global political agreement) principals on agreed government programmes and policies, a Ministry of Finance official told The Zimbabwean On Sunday.
President Robert Mugabe and Prime Minister Morgan Tsvangirai have clashed over appointments of key government officials, with the latest spat between the two involving the formers unilateral rehiring of provincial governors without the latters consent as stipulated under their power-sharing agreement or GPA. In a development seen by the IMF as likely to affect Zimbabwes economic performance this year, Tsvangirai has boycotted some cabinet meetings over what he said Mugabes violation of the GPA.
Harare economist John Robertson concurred, saying the IMF team was likely to criticise government decision to go ahead with a controversial plan to force foreign investors to sell substantial stakes in their businesses to local blacks as well as the increasingly tense political atmosphere in the country. Analysts fear that ongoing election talk will derail government
programme, with Mugabe expected to increasingly return to the populist policies of his former Zanu (PF)-led government in order to endear himself to the electorate ahead of polls tentatively set for mid-2011.
The IMF team last visited Zimbabwe in July for Article IV Consultations which included discussion of efforts to rebuild the
southern African economy as well as Harares overdue financial obligations to the Poverty Reduction and Growth Trust.
Zimbabwe owed the IMF about US$135 million in outstanding loan repayments as of the end of last month. In an interim report published soon after its last visit, the IMF team warned that Zimbabwes economic recovery remained fragile and called for the urgent address of significant policy challenges to restore stability.
It warned of significant domestic and external imbalances that are building up in the fragile economy. The mission urged Harares coalition government to implement radical changes in economic policy without delay, including sufficient
budgetary allocations to key infrastructure rehabilitation projects and social programmes. It also recommended better prioritisation of budgetary expenditures and the need to reduce the government wage bill as a share of revenues, including through the elimination of ghost workers based on the results of the on-going payroll audit. The governments wage bill makes up 68 percent of the national budget.
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