US$11bln debt haunts Zim

HARARE - Zimbabwe, reeling under its debilitating $10,7 billion debt, has owed the International Monetary Fund’s Poverty Reduction and Growth Trust (PRGT) money for longer than any other country.

The Harare government, which is broke, has been looking for money in the region including from South Africa — and overseas.

It is under pressure to meet its domestic budgetary needs and to pay off its IMF debts to open avenues for desperately needed new funding.

Most of the debt overdue to the PRGT facility is held by Sudan and Somalia.
Zimbabwe owes the fund about $133 million.

However, Zimbabwe has been in arrears for much longer.

“Zimbabwe is the only case of protracted arrears to the Poverty Reduction and Growth Trust, the IMF’s vehicle for concessional lending to low-income countries,” the IMF said this week.

“The remedial measures that have been required of Zimbabwe with respect to these arrears are the suspension of technical assistance, which has been progressively lifted, the removal of Zimbabwe from the list of PRGT-eligible countries and the declaration of non-cooperation.”

This came as the IMF executive board decided to relax most restrictions on technical assistance to Zimbabwe, opening the way for staff-monitored programmes.

“The decision opens the way for Zimbabwe to agree on an economic programme that would be monitored by IMF staff,” it said.

The current and new areas for IMF technical assistance to Zimbabwe are in the fields of tax policy and administration, public financial management and expenditure policy, financial sector reform, central bank reform monetary and exchange policies, macroeconomic statistics, anti-money-laundering and combating the financing of terrorism.

In deciding to relax the restrictions, the IMF board took into account various factors: a significant improvement in Zimbabwe’s cooperation on economic policies; authorities’ efforts and renewed commitment to address its arrears problems; and the country’s severe capacity constraints in the IMF’s core areas of expertise that represent a major risk to the implementation of the government’s macroeconomic stabilisation programme. — Sundaytimes

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