A team of International Monetary Fund experts opened long awaited consultations Monday with Zimbabwe about the state of the economy and the country’s relationship with the Fund, long under the shadow of policy differences and unpaid debts.
The Article IV consultations now under way are carried out under the IMF articles of agreement which give the IMF the authority to “exercise firm surveillance” over the foreign exchange policies of members, which are obliged to provide the IMF with the information it needs to monitor policy, and must consult with it on policies.
Hanging over these consultations are arrears in Harare’s debts to the IMF totaling US$127 million. The IMF Executive Board is to meet in February to reconsider the country's standing as an IMF member, and expulsion could be on the table.
The six-member IMF Article IV team is led by Sharmini Coorey, assistant to the director of the IMF’S Asia and Pacific Department. The team met early Monday with Finance Minister Herbert Murerwa, Deputy Finance Minister David Chapfika, Economic Development Minister Rugare Gumbo and senior Reserve Bank officials.
This meeting was followed by a preliminary talk with RBZ Governor Gideon Gono.
Later discussions covered a range of topics including budget overruns in 2006, the outlook for Zimbabwe's economy in 2006, Murerwa's 2007 budget and central bank funding of government operations – a practice the IMF has discouraged.
Deputy Finance Minister Chapfika confirmed the opening of talks in an interview with reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe.
Harare economist Mike Mhizha said the Zimbabwean government was probably not in a position to settle its IMF arrears in the near term to take that issue off the table.