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IMF Probing Harare's Funding Source for 2005 Debt Paydown

The International Monetary Fund has opened an investigation into how Zimbabwe raised the funds it used to pay down debt service arrears. News of the probe comes as an IMF team prepares for Harare consultations starting January 24 that will factor into IMF Executive Board deliberations in March on Zimbabwe’s membership status.

The Reserve Bank of Zimbabwe hastily paid $120 million against around $295 million in debt service arrears last September with a similar board meeting looming at which it was thought directors might recommend obligatory withdrawal by Zimbabwe. Another $35 million was later paid, and the current balance is $148 million, the RBZ says.

IMF Africa Department Deputy Director Siddharth Tiwari said the board ordered the investigation into how Harare raised such large sums at a time when it has not been able to provide its population with food and medicine. Tiwari said Harare ofrficials will be called upon answer IMF questions in a “transparent and open manner.”

Reserve Bank Governor Gideon Gono has sought to dispel charges that his institution raised the foreign currency by raiding private corporate and individual accounts under its control, saying it drew on export-related reserves and the proceeds of gold sales.

Reporter Blessing Zulu of VOA’s Studio 7 for Zimbabwe turned to Harare independent economic analyst James Jowa for perspective on the matter.

More reports from VOA's Studio 7 for Zimbabwe...