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IMF Says Zimbabwe Needs Financial Help to Revive Ailing Economy

  • Irwin  Chifera

International Monetary Fund (IMF) Managing Director Christine Lagarde.

International Monetary Fund (IMF) Managing Director Christine Lagarde.

An International Monetary Fund Mission that is reviewing the success of the Staff Monitored Program (SMP) on Wednesday said it agrees with the Zimbabwean government that Harare cannot resolve its financial problems without support from the international financiers like the IMF and the World Bank

Speaking during interactions with lawmakers from parliament’s finance committee, IMF assistant director and head of mission, Domenico Fanizza, said it is time for Zimbabwe to restore relations with international financial institutions so it can creep out of economic crisis.

He said all is not well with the Zimbabwean economy, which is currently working through the Staff Monitored Program, an informal agreement between Harare and the fund to monitor the implementation of the country’s economic program.

This, however, does not entail financial assistance or endorsement by the IMF executive board.

The SMP focuses on putting the country’s public finances on a sustainable course, while protecting investment and priority social spending, strengthening public finances on a sustainable course, among other issues.

Fanizza said with the backing of international financiers, Zimbabwe’s economy can get back on the rails to recovery.

He said it is necessary for Zimbabwe to implement radical reforms as agreed under the SMP, adding this would lead to restoration of relations with the international community.

Faniza said it was a difficult path but Zimbabwe had agreed to undertake the reforms as this is key to the re-engagement process with the global community.

He said he’s pleased with their preliminary findings which he said indicate that the government is maintaining the right policy direction and meeting some of the benchmarks agreed on in the staff monitored program.

The programs focuses on areas such a public sector financial management, indigenization law and banking sector reform.

Some economic experts say though the IMF Mission has noted some positives in the implementation of the program, the government still faces challenges in maintaining fiscal discipline, reducing its workforce and lack of clarity on indigenization.

Asked why the IMF was not advancing financial assistance to help save the troubled Zimbabwean economy as is happening with Greece, Fanizza said that could only happen if Zimbabwe paid it debts or agreed on rescheduling its nearly 10-billion dollar debt with international financial institutions.

Zimbabwe says it is working with the financial institutions to resolve its debt crisis.