Zimbabwe is in good standing with the International Monetary Fund but it has to clear its arrears with other international financial institutions before it can get any new funding, IMF Director of Communications Gerry Rice said today.
A team from the IMF is in the country reviewing its Staff Monitored Programme and will be in the country until 17 September.
Zimbabwe’s arrears to the World Bank and the African Development, the two key financial institutions which can open doors for the country, are about US$2 billion.
Finance Minister Mthuli Ncube is working on clearing the arrears and hopes the country can do so next year.
For Zimbabwe to get new funding, Rice said: “We would need some financing assurances as we always do in our programs from other official bilateral creditors, and what I just said and what you asked, agreeing on a coherent set of economic policies that we think would put the country back on the path of macro stability and lay the foundation for growth.
“So that’s the discussion that’s going to be at the heart of this staff visit that’s ongoing right now. And we’re trying to be supportive, we want to be supportive and we’re pushing in that direction.”
Below is a transcript of the briefing which pertains to Zimbabwe.
QUESTIONER: I wanted to ask about Zimbabwe. A friend has sent me an email that said, we have no currency in circulation, we have no water, we have no electricity. You have a staff monitored program. The arrears you’ve talked about in the past will be taken care of. They’ve made some fiscal progress with the Finance Minister, but I’d like to ask you what does the government there have to do to get on track and open the door to an IMF Program?
RICE: Thank you for that question. A couple of things I can tell you about Zimbabwe. One, as you said, we have what’s call a Staff-Monitored Program, which means that we are engaging fully with Zimbabwe on policies and advise, and discussion but without financing at this point, and I’ll come back to that in a little bit.
So, what are we advising the Government to do in terms of the reforms and how to address some of these issues that you’ve raised? It’s of course with the IMF; first and foremost restore macro and financial stability, so we think that will require a fiscal adjustment, adoption of reforms to allow the effective functioning of market-based foreign exchange and debt markets, structural reforms, including to reform and privatize state-owned enterprises, enhance governance including in procurement, and revenue administration, and generally improve the business environment.
We also are advising important safeguards to protect the country’s most vulnerable people which, you know, was a big part of your question. So, we have an IMF Team actually in Harare, as of September 5, we think they’ll be there until around the 17th, and that will be the first review of this SMP, the Staff-Monitored Program.
So what would Zimbabwe need to do to, you know, get financing from the IMF and others? Zimbabwe is in good standing with the IMF, okay, I’ve said that before here. They have cleared their arrears with the IMF, but for financing to be forthcoming from the Fund, they would need to clear their arrears also to other international financial institutions.
We would need some financing assurances as we always do in our programs from other official bilateral creditors, and what I just said and what you asked, agreeing on a coherent set of economic policies that we think would put the country back on the path of macro stability and lay the foundation for growth.
So that’s the discussion that’s going to be at the heart of this staff visit that’s ongoing right now. And we’re trying to be supportive, we want to be supportive and we’re pushing in that direction.
QUESTIONER: Just a brief addendum, does the Parliament have to pass a human rights law that’s been proposed but not acted upon, and likewise something that assures democratic participation of other parties in government?
RICE: I don’t have anything on that. As you know, the Fund is focused on the economics so, you know, it might a question addressed to some of the bilateral creditors, I just don’t have anything on that.