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IMF: Zimbabwe Not Automatic Recipients of Loan This Year

  • Blessing  Zulu

International Monetary Fund Managing Director Christine Lagarde.

International Monetary Fund Managing Director Christine Lagarde.

The International Monetary Fund says it’s not automatic that Harare will get a loan in the third quarter of this year as the determination will be made by the international lender of last resort’s executive board.

Getting fresh money will also depend on Harare settling its $1,8 billion in arrears to the international lenders. In Lima, Peru, last year at the annual IMF/World Bank annual meetings, Zimbabwe had set an ambitious target to repay the loan by April.

John Mangudya told Reuters that Harare expects to pay arrears by June and thereafter the IMF to resume lending the country money for the first time since 1999.

However, skepticism remains on whether the southern African nation can pay back its debts, as it is presently repaying a paltry 150 thousand dollars a month on its $124 million debt to the IMF.

Economists have also urged Harare to normalize ties with Washington which has veto power in the Board. America holds 16.85 percent of the board’s total votes compared to Germany, Japan and Britain with a combined 15,81 percent of the influential board’s votes. The U.S has similar veto power in the World Bank.

America has sent mixed signals on the issue. Former U.S ambassador to Harare, Bruce Wharton, said the U.S will not block Harare despite its sanctions regime.

But recently Senator Bob Corker, chairman of the Foreign Relations Committee, wrote a letter to the U-S secretary of the treasury stating that Washington must insist on democratic reforms as per the U.S law before endorsing Harare’s bid for fresh loans.

IMF resident representative in Harare, Christian Beddies, says the debt repayment date has remained fluid for Zimbabwe.