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IMF Urges Zimbabwe to Seek International Relief From Worsening 'Debt Distress'

  • Ntungamili Nkomo

The IMF advised the Harare unity government to seek a consensus on how to go about catching up on its arrears and to improve relations with the international community to build support for eventual debt forgiveness

The International Monetary Fund says Zimbabwe’s economic recovery remains “very fragile” and that Harare needs to seek forgiveness of its increasingly onerous US$7 billion in loans, payments on of which are in arrears.

In a report issued Wednesday, the IMF said Harare was in “debt distress” advising the Harare unity government to build a consensus on how to go about catching up on its arrears and to improve relations with the international community to build support for an eventual program of debt forgiveness.

The Bretton Woods institution, to which Harare owes some US$140 million, said debt relief was the only way for Zimbabwe to get out from under its massive and growing debt burden.

The IMF said that even if Zimbabwe were to put in place sound macroeconomic policies or increase its extraction of minerals to boost revenues, it would not be able to deal with its debt load without cancellation.

"Zimbabwe is in debt distress, and the debt overhang cannot be resolved without debt relief even if policies are improved and mineral extraction is increased," the IMF said in an Article IV follow-up report.

Economists say Harare should agree to set up an IMF staff-monitored economic program to pave the way for debt forgiveness by members of the Paris Club of sovereign lenders.

Economic analyst Masimba Kuchera of the Coalition on Debt and Development told VOA Studio 7 reporter Ntungamili Nkomo that the IMF should lead by example and write off Zimbabwe’s arrears.

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