News:"We Are Far From Deal With Zimbabwe" Says The IMF. Governance And Transparency Need Fixing
The International Monetary Fund announced today the official position that the Fund is not currently in any negotiations with Zimbabwe with the view to provide the country fresh financing. Speaking at a press briefing today in the Washington in response to a question, US, Gerry Rice, Director, IMF Communications Department, said that there currently no financing program under discussion with Zimbabwe.
A Bloomberg journalist had asked:
I understand that Zimbabwe was to have repaid $1.8 Billion in arrears to the fund and I believe that was due last month. We have comments from the authorities in Zimbabwe implying that that has not been paid and perhaps won't be forthcoming any time in the near future. Can you provide an update on that?"
Zimbabwe continues to be in arrears to the fund. I'm glad you asked the question because there's been a bit of reporting on Zimbabwe and in fact some misreporting so let me try and clarify.
The first thing I'd say is there's no financing program under discussion with Zimbabwe at this point. However the authorities have announced a plan to clear their arrears as part of their re-engagement with the international community. So the way this would work is that once the arrears are cleared, and again they have not been, and our board would approve the normalisation of relations with Zimbabwe. Any requests for financing from the authorities would then be considered.
And again, as normal of the fund and would be true also in this case, we need a couple of things to be in place before even that consideration could take place which is 1) the design of sound economic policies to ensure the structural imbalances are meaningfully addressed, and 2) Obtaining financing assurances regarding Zimbabwe's ability to service and sustain its debt.
So what i'd say on this is that irrespective of the calendar of arrears clearance, the economy needs immediate reforms to address the vulnerabilities that have come to the fore. We think expeditious implementation of those reforms is critical to reverse Zimbabwe's economic decline and in the process protect the most vulnerable segments of the population. We stand ready to help with that implementation as usual.
A follow on question was asked:
As the fund considers whether to normalise relations, to what extent does the fund consider issues like human rights and governance. This regime doesn't have the most sterling record in that regard. There a lot of questions about the trustworthiness of that regime.
The IMF representative answered
I hope I was clear. We are far from a program, deal, with Zimbabwe. I hope I was clear on that. In terms of what would need to be taken into account it those things that i just mentioned. Ofcourse, governance, accountability, transparency are also issues that will taken under consideration were we in a position to move forward with any kind of program. And under that rubric falls vulnerable groups and others that are benefiting from the economic policies that are in play.
Watch a snippet of the video below:
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Recent press reports implied Zimbabwe had begun a process of reengagement with the IMF and that the possibility of fresh funding were high before the end of 2016. Zimbabwe's government owned newspaper, The Herald, for example said last week that Zimbabwe could be receiving "an emergency injection of funds from the IMF and other multilateral institutions" once it's debt arrears have been cleard. Reserve Bank governor, Dr. John Mangudya Mangudya said that they "hoped new loans to Zimbabwe could come before the end of the year."
Read more: IMF.
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