Harare has made an urgent appeal to South Africa to finalize a loan agreement under discussion and release funds amid reports that Zimbabwe’s economic crisis has only deepened with the government’s payment of $120 million in scarce hard currency to the International Monetary Fund to stave off the loss of membership.
A senior official at the Reserve Bank of Zimbabwe said the country desperately needs an infusion of hard currency to purchase fuel, food, and essential inputs for agriculture and manufacturing - fertilizer, spare parts, raw materials, and components.
Ironically, the central bank exhausted the country's already scarce foreign exchange to make the payment, sweeping hard currency out of exporter's accounts.
But the South African government is standing firm on its demands that Harare first meet the conditions Pretoria has set for release of loan funds.
South African Finance Ministry spokesman Logan Wort said Harare and Pretoria have deadlocked on the issue, and that loan negotiations have been taking much longer than expected as a result. Pretoria has insisted that Harare must implement political and economic reforms, and in particular engage a dialogue with the opposition Movement for Democratic Change.
Reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe sought perspective on the loan impasse and other aspects of the crisis from Sydney Masamvu, a Pretoria-based senior analyst with the International Crisis Group’s Southern African branch.
The IMF board is scheduled to meet on Friday to examine whether Zimbabwe, already suspended from membership in the Bretton Woods organization, should be expelled for failure to pay the remaining $180 million in debt service arrears.
Yet expulsion from the IMF could be a lesser danger for Zimbabwe than a continued economic collapse, says economist John Robertson of Harare.
Mr. Robertson notes that expulsion requires a vote of 85 percent of board members, so Zimbabwe needs only a few votes in its favor to hold onto its membership, if not recover its status as an active member, allowing it access to loans.
Yet even if Zimbabwe avoids being voted out of the IMF, the economic outlook at home is bleak at best, Mr. Robertson tells Studio 7 reporter Blessing Zulu.