HARARE – (News of The South) – Zimbabwe needs to clear its arrears with other financial institutions as well as reach an understanding with it’s bilateral creditors over clearance of arrears, said the International Monetary Fund (IMF), for the country to become eligible for further financial support from the Fund.
The southern African nation did not benefit from the IMF’s Catastrophe Containment and Relief Trust after it had written to the Fund asking for assistance. Zimbabwe is seeking US$220 million to fight Covid-19.
“So, what I can say is the IMF’s CCRT is designed to provide debt relief only to countries who have debts owing and upcoming repayments to the IMF. So, that initiative is not applicable to Zimbabwe because it doesn’t owe any debt to the IMF,” said IMF spokesman Gerry Rice.
Albeit the country having cleared its US$107.9 million debt in 2016 to IMF its external debt to other multilateral institutions stands at over US$8 billion.
“And beyond the issue of arrears, consideration of any future request would require Zimbabwe to be ready to implement strong macro policies and structural reforms. So, there are a set of issues there.”
However, the IMF is still in discussions with Zimbabwe. This includes engaging in the policy dialogue with the southern African nation.
“We do recognize the dire circumstances facing the people of Zimbabwe, and we’re providing technical assistance right now, and our active engagement is ongoing,” he added.
Zimbabwe’s GDP is poised to contract by 7.4% from an initial projection of 0.8% growth in 2020, according to IMF’s Sub-Saharan Africa Regional Outlook. But, the southern African nation’s economy is set to rebound to a small growth of 2.5% in 2021.
Also, inflation is projected to end the year at 319% while broad money as a percentage of GDP forecast at 15%.
The Breton Wood Institution noted that the sharp downward revision largely reflects the fallout from the spread of COVID-19 and lower than-expected commodity prices.
Comments
About Author
