admin
Tinashe Farawo
Zimbabwe needs a strong economic reform programme to complement the lines of credit that it is likely to receive from global lending institutions, the International Monetary Fund has said.
International creditors last month gave a ringing endorsement to Zimbabwe’s debt clearance strategy crafted by Government, thereby clearing the way for Zimbabwe to receive new credit support for capital development.
The monumental breakthrough put the country in good stead with international finance institutions that are now set to release funding for Zimbabwe.
Zimbabwe has struggled for 15 years to address its debt headache and this has proved to be a major impediment to economic development.
Responding to questions from The Sunday Mail, IMF Resident Representative in Zimbabwe, Christian Beddies said Zimbabwe now needs to see through its obligations set out in its debt clearance plan.
He said the successful completion of the Staff Monitored Programme is key to the process.
Said Beddies: “The purpose of the Lima meeting was to get creditors’ and Zimbabwe’s development partners’ buy-in for the Government’s proposal to clear the arrears to the three IFIs – AfDB, IMF and World Bank.
“I am pleased to say that we have achieved this goal.
“The ball is now in the Government’s court to prepare an ambitious economic reform program and we are of course more than happy to assist the Government in this endeavor.
“The successful completion of the Staff Monitored Programme is of course key to this process. And we need a strong economic reform program that could be supported by the IMF under a financial arrangement.”
Under the Staff Monitored Programme, Zimbabwe has undertaken to implement a raft of economic reforms and austerity measures meant to reduce public spending on non-capital projects. Some of the reforms include reducing Government’s wage-bill from the current 80 percent of the total revenue to around 40 percent.
He lauded the feasibility of Zimbabwe’s strategy saying once completed, the country would soon receive financial support from the IMF.
“We do not see any reason why it (the strategy) would not be feasible.
“The strategy is based on a sound arrears clearance framework and it contains key reforms that could be supported by development partners.
“Of course, there are many details yet to be ironed out.
“This is what we are working on with the authorities.
He added: “The Articles of Agreement for these IFIs make it clear that as long as a member country is in default, it cannot access funding from these institutions.
“It is therefore important that these arrears be cleared. After arrears’ clearance, we need to agree on an economic reform program that could be supported by the IFIs, specifically by their Executive Boards.”
A high level Zimbabwe delegation that included Finance and Economic Development Minister Patrick Chinamasa and Reserve Bank of Zimbabwe Governor Dr John Mangudya was in Lima, Peru last month to present the country’s debt clearance strategy to creditors.
The strategy was overwhelmingly endorsed.
Britain warms up to Harare
Lincoln Towindo
The British government recognises Zimbabwe’s observance of human rights and improving political and economic situation, foreign and Commonwealth affairs minister Mr Phillip Hammond has said.
This is the first time London has remarked favourably about human rights and political stability in Zimbabwe 15 years post its historic land reforms.
The impasse between Zimbabwe and Britain stems from the ex-colonial power’s reneging on a 1979 Lancaster House obligation to fund land reforms.
In the early 2000s, the then Prime Minister Tony Blair’s administration instigated economic sanctions against Harare following the fast-Track Land Reform Programme.
The stand-off appears to have now come full circle, with the British government priming itself for normal diplomatic relations.
A number of British businesspeople have also been making investment inquiries in Zimbabwe with support from their government.
On October 22, 2015, Mr Hammond told the House of Commons that the Zanu-PF Government instituted positive economic reforms.
He was responding to a question by Leeds Central representative Mr Hilary Benn regarding Anglo-Zimbabwe relations.
“Since the 2013 elections, our assessment of the political situation in Zimbabwe remains broadly the same, with 2015 signaling some positive developments.
“Within the Zimbabwe African National Union administration there are signs of reformist policies beginning to emerge, especially on the economy. The human rights situation has remained relatively stable and reported violations continue to fall.”
Harare-based political analyst Mr Alexander Rusero said Britain’s new position indicated a failed isolation policy.
“This represents a harsh reminder that a foreign policy hinged upon isolationist policy is not sustainable in the reality of the 21st century world,” he said. “There is nothing much to read from the shift, but just a simple indication of a failed policy of yesteryear, in a world where co-operation is the new game in town. This represents a revisionist policy whereby Britain is swallowing its pride by accepting the realities of modern day foreign policy.”
President Mugabe’s Government has shown willingness to normalise relations with the West.
In 2014, it hosted the first British-sponsored business delegation to visit Zimbabwe in 20 years. In early 2015, the European Union reversed the bulk of its sanctions embargo on Zimbabwe in spite of spirited resistance from British representatives.
And in July, the British Embassy in Harare released a report titled “Zimbabwe: Commercial Opportunities (2015)”, detailing opportunities for British companies.
The report states how Zimbabwe’s Government is “developing more investor-friendly investment policies”, also pointing to massive potential for high investment returns.
Online Reporter