Access to credit key to development, says IMF

Golden Sibanda Senior Business Reporter
Zimbabwe faces formidable economic challenges, but sound policies can unlock the country’s economic potential, the International Monetary Fund has said. Head of the IMF Mission to Harare, Mr Domenico Fanizza, said yesterday that Zimbabwe needed to normalise relations with international creditors to access fresh credit. Mr Fanizza said normal relations with international lenders were key for Zimbabwe’s economic development strategy such as the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.

He was speaking at The Herald Business breakfast meeting attended by Government ministers and executives from a cross section of the business sector. “The ambitious development objectives set out in the Zim-Asset strategy cannot be achieved without the support of the international community,” Mr Fanizza said.

“Zimbabwe faces formidable economic challenges, but sound economic policies can unleash its strong economic potential and bring better living conditions to its population.”
The IMF mission is conducting its third review of the Staff Monitored Programme to evaluate Zimbabwe’s progress towards re-engaging the global lender.

Mr Fanizza said mending relations with the international financial community was critical for Zimbabwe to get support for rescheduling of its overdue debt.
He said Zimbabwe could not access funding from the IMF and other international lenders such as the World Bank and African Development Bank due to its arrears.

Speaking at the same occasion, Finance Minister Patrick Chinamasa said Zimbabwe owed international creditors about US$6,9 billion.
The country also owed IMF US$2,55 billion, with about US$1,6 billion of that amount already in arrears as it failed to pay back since 2002.

“What it means is that we are unable to access fresh credit,” he said.
“Zimbabwe has engaged both IMF and WB and AfDB on possible strategy to clear its external debt.”

Minister Chinamasa said it was key to normalise relations with the IMF since all lenders across the world dealt with borrowers on the basis of what the IMF said.
Reforms under the Staff Monitored Programme include transparency in minerals revenue and how it is applied, reforms in public debt management, building reserves, increasing social spending, cuts on Government wage bill and improving financial sector management and stability.