28 March 2014

Zimbabwe: IMF Committed to Assisting Zimbabwe

THE International Monetary Fund is committed to assisting Zimbabwe with stronger macro-economic policies and will continue to monitor the country's progress until June.

The Bretton Woods institution said achieving Zimbabwe's growth potential over the medium-term depends on pursuing strong macro-economic policies and increasing budgetary resources.

In a statement at the conclusion of a mission on Zimbabwe, the IMF said increasing budgetary resources going to non-personnel related spending, and implementing structural reforms to foster investment, improve the business climate, and strengthen governance and institutions, including increasing the transparency of the minerals regime will help the country improve its GDP.

The global lender said the SMP provided a useful anchor for Zimbabwe's economy in an election year; but reckoned, the electoral process and transition to a new government affected the pace and scope of implementation of the policies and reforms under the programme.

It said Government has reiterated its commitment to the SMP and is working towards achieving the SMP objectives.

"The macro-economic environment is expected to remain challenging in 2014, and the outlook is for continued moderate growth.

"It will also be necessary to engage with the country's creditors to work towards a solution to the long-standing debt arrears problem," the IMF said.

The country is currently saddled with a global $6 billion debt and the Minister of Finance and Economic Development said token payments as a commitment to resolving the debt were being made to lenders.

"Downside risks to the outlook include the possibility of further weakening of export prices, a tightening of external financing conditions, as well as risks related to policy implementation delays.

"Should these risks materialise, they would adversely impact output growth and fiscal revenue. To mitigate these risks, it is important to strengthen fiscal policy, identify potential sources of domestic and foreign financing, and address financial sector vulnerabilities," it said.

The IMF said the authorities and the mission made progress in discussions towards an understanding on a package of policy measures and reforms to be monitored in the context of the Staff Monitored Programme through to June 2014.

"Discussions on these policies and reforms will continue on the sidelines of the annual IMF and World Bank Spring Meetings in early April; and the authorities remain committed to work on the outstanding deliverables under the programme with the goal of completing the review of the SMP," it said.

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