IMF wants Zimbabwe to do more

Published: 27 March 2014

ZIMBABWE is fulfilling terms of a payment plan it entered into with international financiers towards clearing the $6,1 billion global debt that it owes them, Finance Minister Patrick Chinamasa has said.

Although Zimbabwe does not currently have the capacity to service the global debt, Minister Chinamasa said the country is making token payments to show commitment to resolve the debt situation.

"We entered into a payment plan with the Bretton Woods institutions and so far we have been fulfilling that. It's a token payment. The Bretton Woods institutions are also looking at debt relief," said Minister Chinamasa.

The Finance Minister said Zimbabwe has not been able to address some of the issues it discussed with the International Monetary Fund last year which require long-term solutions.

The IMF mission this week concluded discussions for the 2014 Article IV consultation with Zimbabwe where they looked at a number of issues, most of which are structural.

Minister Chinamasa told reporters yesterday that some of the issues raised by the IMF were structural issues that required wider consultations which are currently underway.

"They are looking at a number of issues and it's clear at this stage that we have not been able to address some of the issues we discussed last year. There are also some structural issues where we thought we would have made more progress by now but unfortunately because we needed to carry out wider consultations we have not been able to do," said Minister Chinamasa.

The issues raised by the IMF include employment costs as a proportion of the budget which Government said could not be addressed in the short to medium-term.

"Addressing them overnight would mean very drastic measures which I am not prepared to take. That would mean retrenchments in the civil service," he said.

The other issue is the amendment to the Mines and Minerals Act in order to create a legal template which would be conducive for viability in the mining sector. That exercise is underway and will take some time to build the necessary consensus.

Minister Chinamasa said Government is currently consulting stakeholders in the financial services sector with a view to amend the Banking Act primarily to address issues of corporate governance. The Government is also restructuring the diamond sector to enhance accountability and transparency as well as addressing issues of consolidation of the sector. Minister Chinamasa said constructive engagement with Bretton Woods institutions will continue and another meeting will be held in June to discuss progress.
- Herald

Tags: IMF,