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IMF to stand by Zimbabwe

by Staff reporter
05 Mar 2020 at 05:37hrs | Views
The International Monetary Fund will continue engaging Zimbabwean authorities with regards to the country's efforts to restore macro-economic stability, the Washington based lender's country representative Patrick Imam has said.

Mr Imam's comment comes amid international media reports that the global lender is considering abandoning its activities in the country in protest of "uneven implementation of policies" by Government.

The Financial Times reported this week that "secret money printing" by the central bank of Zimbabwe has derailed efforts to revive the country's economy and "now threatens to end IMF oversight of the Government's reform drive".

Quoting unnamed sources, the Financial Times alleged that the IMF's continued involvement in Government's reforms "is now in doubt". The article, which was said to be malicious and misleading by the Reserve Bank of Zimbabwe, went on to say that Government plans to "continue monetary reforms without IMF oversight".

Mr Imam, however, said the IMF is still very much involved in Zimbabwe and may even send a mission before the Spring meetings in April this year.

"The IMF always stands by its member countries. We will remain engaged through policy advice, technical assistance, and we will continue to assist the authorities in restoring macro-economic stability," said Mr Imam in an interview with the Herald Finance & Business this week.

He said despite the challenges that had resulted in the Staff Monitored Programme going "off track" as per the Article IV Consultation with Zimbabwe report, "there is a lot of good will on both sides to move forward and to continue our dialogue".

"A mission may come to Zimbabwe soon, and then we have the Spring meetings in Washington in April that will help clarify the way forward," he said.

For the immediate future though, Mr Imam said the focus should be on ensuring that everything is done to address the issue of food insecurity and make sure that no Zimbabwean is food insecure. He said the subsidy on mealie-meal though commendable had been abused in the implementation process.

"While subsidies are not necessarily a bad thing, our advice to the authorities - and they are in full agreement - is that they can achieve the same outcome with less costs.
 
"We have seen with the recent subsidies for mealie-meal that despite the laudable aim, the subsidy did not achieve its aim of providing cheap mealie-meal to the vulnerable groups. Instead it disappeared from the shelves, and vulnerable groups had to buy it on the black market at a high cost.

"The Government has recognised this, and is bolstering more effective social transfer tools, notably harmonised cash transfer," The world body said over the medium-run, the authorities should also continue to pursue their drought mitigating efforts and address the issue of land tenure.

This, Mr Imam said, would go a long way in promoting agricultural investments, in particular irrigation development, and avoid food shortages.

Source - the herald

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