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THE European Union (EU) has said it is willing to provide financial support for the country’s reform programme as articulated in the ‘Lima Plan’.
EU ambassador to Zimbabwe Philippe Van Damme said on Friday that the proposed reform programme was “ambitious” and “could help the economy grow out of its current problems.”
“We have indeed encouraged the Government to move forward with its reform agenda, that is the reform agenda that the Government presented to the annual meetings of the IMF and World Bank in Lima in October 2015, which was a home-grown reform agenda of the Government
“We believe that if you can work out this agenda and effectively implement it, we as international partners we are willing to help you implement these reforms to the extent that if there is no progress on the ground on some of these programmes we can mobilise funding,” he said.
He was speaking at a public dialogue.
Ambassador Van Damme said for the EU to commence supporting the reform programme, Zimbabwe needs to come into agreement with the multi-lateral financial institutions and come up with a detailed time-bound reform agenda and they start implementing it.
According to the paper that the Zimbabwean delegation presented at the Lima meetings — the ‘Zimbabwe: Strategies for Clearing External Debt Arrears and the Supportive Economic Reform Agenda’ — tenets of the proposed reform programme consist of the following:
Strengthening financial sector confidence, accelerating the re-engagement process with the international community, revitalising agriculture and the agro-processing value chain, advancing beneficiation and/or value addition to the agriculture and mining resource endowment,focusing on infrastructure development, unlocking the potential of small-to-medium enterprises, improving the investment climate, accelerating public enterprises reform and improving public finance management; modernising labour laws and aligning of laws to the Constitution and adhering to the rule of law; and pursuing an anti-corruption thrust.
But development of a detailed reform programme will depend on the country’s arrears clearance to the three international financial institutions, namely the World Bank, IMF and the African Development Bank as a first step toward seeking a debt treatment by the Paris Club.
According to Zimbabwe’s clearance plan the resolution of external debt arrears to the IFIs will be achieved through the use of domestic resources to clear arrears to the IMF; use of a bridge loan to clear AfDB Group debt arrears; and use of a medium to long-term facility from a friendly country to clear arrears to the World Bank Group.
And only after it has resolved the Paris Club debt can a detailed medium to long-term reform programme be agreed upon. — BH24
Online Reporter