9 March 2016

Zimbabwe: 'Repay Debts and IMF Will Resume Lending'

Photo: Kudakwashe Hunda/The Herald
From left, IMF 2016 Zimbabwe leader Domenico Fanizza, minister of finance Patrick Chinamasa and Reserve Bank governor John Mangudya at a press briefing in Harare.

The International Monetary Fund will resume lending to Zimbabwe only after the country clears its arrears to the World Bank and the African Development Bank and IMF, a senior official said.

Speaking before the Parliamentary Portfolio Committee of Budget and Finance last week, IMF Head of Mission Domenico Fanizza said while preliminary results showed the Staff Monitored Programme for Zimbabwe was successful, there was need to address some underlying issues.

"Until Zimbabwe has paid back the agreed arrears to the World Bank and the African Development Bank we cannot act. But there has been progress considering that there is a plan to pay the arrears which was presented in Lima in October last year and the plan received broad support from the creditors. We have been working with Zimbabwe for some time now and we have made progress. Now we are getting to the crunch point where we need to explain the board that Zimbabwe is repaying the arrears and is willing to implement ambitious economic reforms ," said Mr Fanizza.

He, however, warned that reform alone without re-engagement with international financial institutions will not do much to revive the economy of Zimbabwe. He said going forward IMF is now pushing towards Zimbabwe's economic transformation while also driving the re-engagement programme.

On the indigenisation policy, Mr Fanizza said Zimbabweans were better placed to decide what they wanted to do with the law but stressed that clarity is key to its success.

"We recognise that there was an issue with the indigenisation law and we believe it has been obstacle to investment but it is up to Zimbabwe to decide what it wants.

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