IMF outlines conditions

The IMF stopped considering loans in 1999 after Zimbabwe violated the conditions by defaulting on repayments of its debt to the Bretton Woods institution. Zimbabwe’s external debt has since ballooned to US$7billion and the IMF said the southern African country was in “debt distress”. Zimbabwe’s improving economy, success in ending inflation, central bank reforms and strict monetary policies have mollified the IMF.

“To move toward a staff monitored program, which is a stepping stone to IMF lending and debt relief, the authorities will need to improve data reporting, further strengthen macroeconomic policies, and continue to garner the support of the international community,” Vitaliy Kramarenko, an IMF official who led a team to review the government’s economic programmes, said in a statement.

Kramarenko visited Harare from October 25-November 3, 2010 and the IMF staff mission met with Finance Minister Tendai Biti, Economic Planning and Investment Promotion Minister Tapiwa Mashakada, Energy and Power Development Minister Elton Mangoma, Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono, and other senior officials, as well as representatives of the financial, business, and diplomatic communities. Ther IMF noted that Zimbabwe’s economy was completing its second year of “buoyant economic growth”.

Zimbabwe has suffered a decade of economic meltdown, worsened by the withdrawal of crucial Western funding over policy differences with the previous government of President Robert Mugabe. The IMF said Zimbabwe must satisfy several more requirements such as eliminating ghost workers on the civil service, establishing security of land tenure, clarifying ownership requirements under the indigenization legislation, and addressing concerns about governance in the diamond sector.