Online Reporter
The Herald, 26 November 1998
ZIMBABWE is likely to wait a little longer to get the expected US$157 million (55,9 billion) balance of payments support as the International Monetary Fund is now seeking clarification from the Government on its land reform policy and salary adjustments for civil servants next year before it can consider releasing the Funds.
The money had been expected to be released next month. An IMF spokesman said in a statement yesterday that the major outstanding issues had to be addressed if the budget was to remain on track. But the statement dispelled strong rumours in Harare which said that the fund was no longer interested in disbursing more money.
The Ministry of Finance said yesterday progress had been made in negotiations with the IMF and the country could still get the funds at the end of the month. More money, some US$326 million ($12,3 billion), would subsequently be released from the fund as well as other donors in March next year if the Government continued to meet the set targets.
The IMF said it had toughened its stance to ensure that the Government did not proceed immediately with large-scale land acquisition, fearing that it could have serious fiscal implications next year as well as hurting business confidence.
The IMF spokesperson said although the bank was impressed with the outcome of an international conference on land, held two months ago, it was disturbed by recent reports that the Government had issued land acquisition orders to a large number of farmers.
At the conference, it was agreed that the land reforms would begin with a two-year inception phase that would be limited in scope to allow various models of land reforms to be tested. “Fund (IMF) staff has reached understanding with the Zimbabwean authorities on most of the key elements of an economic programme for 1999.
Lessons for today:
- Financial support from institutions like the IMF is not automatic, it depends on meeting strict conditions related to economic policies and governance. The IMF sought clarification before releasing funds, highlighting the need for clear communication and adherence to agreed frameworks.
- Zimbabwe’s land reform plans and civil servant salary adjustments raised concerns for the IMF, showing how domestic policies can influence international confidence and funding.
- Delays in receiving balance of payments support can strain a country’s economy, especially when foreign reserves are low.
dyton mupawaenda