Tapiwanashe Mangwiro
HARARE – Director of Communications for the IMF, Mr Gerry Rice held a virtual press conference on updates concerning what the IMF has done to help combat the Covid-19 pandemic in countries that need assistance.
The question on Zimbabwe was why did the country not benefit from the IMF’s Catastrophe Containment and Relief Trust (CCRT), since the country had written to the IMF asking for assistance.
Rice said, “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. So, that’s why it’s not eligible for the CCRT. It doesn’t owe the IMF any debt. In fact, Zimbabwe is in good standing with the IMF”.
The issue that keeps Zimbabwe from getting any assistance from the IMF is the need to clear arrears with other financial institutions, as well as reach an understanding with its bilateral creditors over clearance of arrears to them. Beyond the issue of arrears, consideration of any future request by the IMF would require Zimbabwe to be ready to implement strong macroeconomic policies and structural reforms.
“The bottom line is we are in discussions with Zimbabwe. We are engaged in the policy dialogue with Zimbabwe. 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,” said Rice
Rice confirmed that South Africa has requested IMF support under the RFI and that the instrument is up to 100% of their quota share. It is now the amount that is left to be deliberated on by the IMF Executive Board. South African government however is yet to submit their official plan to the IMF and are understood to be ready by Monday 11 May 2020.
Zambia recently requested for Fund support for its economic reform program, aimed at restoring macroeconomic stability, as well as debt sustainability, while increasing growth and fighting poverty from the IMF. The country however does also qualifies as a Poverty Reduction and Growth Trust Facility (PRGT) eligible country and as so, qualifies for a rapid credit facility which they have again applied for.
According to Rice, the IMF and the Zambian authorities are in discussion on their economic responses to COVID-19, as well as their macroeconomic objectives and policies hence no bailout is being considered as yet by the international financial institution.
The IMF has since doubled access to it’s emergency facilities, the rapid credit facility, the rapid financing instrument, which will enable them to meet up to $100 billion in expected demand. These facilities allow the Fund to provide emergency assistance without the need to have a full-fledged program, so they do not entail the usual IMF conditionality.
As of Wednesday, the IMF’s Executive Board has approved financing under these emergency facilities, at record speed for 50 countries, totaling about $18 billion.
Comments
About Author
