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Finance and Economic Development Minister Patrick Chinamasa says he will engage the International Finance Corporation, a unit of the International Monetary Fund, to extend financial support to local industry.Minister Chinamasa said he did not understand why the International Monetary Fund’s private arm was not willing to fund Zimbabwe’s private companies.
He said this yesterday at The Herald Business breakfast meeting attended by International Monetary Fund Head of Mission Mr Domenico Fanezzi, Government Ministers and business people.
According to the Confederation of Zimbabwe Industries, the manufacturing industry requires about $8 billion to recapitalise and increase production.
“What is stopping the IFC, which is the private sector arm of the IMF. What is stopping them from supporting our private sector? I still have not got an answer to that question. Which means the relationship can be interpreted as punitive against us,” Minister Chinamasa said.
“I can understand the standoff that Government cannot access fresh money from the IMF, the World Bank and AfDB, as is currently the position.
“But the private sector is not under sanctions, it’s not guilty and so I do not understand the continuing isolation by IFC in refusing to support the (Zimbabwe) private sector,” Minister Chinamasa said.
He said he had engaged IFC over the issue, but would not get a satisfactory answer other than the explanation that this was a punitive measure.
Minister Chinamasa said Zimbabwe cannot get financial benefits as a member of the IMF because of the fund’s position that it will not give Zimbabwe credit as it had not paid previous debts, but IFC had no reason not to support industry.
Mr Fanezzi said IFC was a separate arm of the IMF and he had no authority to comment on their behalf as to why they did not support local industry.
According to Minister Chinamasa, publicly guaranteed debt stands at $6,9 billion. About 75 percent of the debt has been in arrears since 2002. Government is servicing private debt of $1,9 billion.
“Government is seeking to engage the IMF so that as a member we can benefits of our membership.
“IMF has a strong voice in economic circles of the world, what they say resonates all over the world,” he said.
Zimbabwe’s IMF funding quota stands at $550 million, but cannot access it due to the arrears issue despite the suffocating liquidity crisis facing it.
Minister Chinamasa said the relationship between IMF and Zimbabwe should not be that of liquidator and debtor; where the fund stands aside and watches the country seek in economic quagmire.
He suggested the relationship should be one of judicial manager and debtor, whereby IMF and World Bank nurse and nurture Zimbabwe to old glory.
Online Reporter