Zim debt arrears

Zim told to normalise relations with IMF

The Herald by Nelson Gahadza

January 28, 2015

The International Monetary Fund's representative to Zimbabwe, Mr Christian Beddies, says the Government should deliver on its commitment to normalise relations with multilateral institutions in order to resume financial assistance.

Mr Beddies last week said Zimbabwe is in arrears in excess of $120 million to IMF [total debt $124 million] but the two parties are assisting each other to resume financial assistance.

"We have no financial relationship with Zimbabwe but we are trying to work on it," he said.

Zimbabwe currently has no access to international credit lines due to its non-payment of its international debt.

"We are giving technical assistance to Zimbabwe to normalise relations and after that we can resume financial assistance," he said.

Government through the IMF's Staff Monitored Programme is implementing various policies that are aimed at enhancing business competitiveness.

The SMP aims to strengthen the country's external position, as a prerequisite for arrears clearance, resumption of debt service, and restore access to external financing.

On October 29, 2014, the management of the International Monetary Fund completed the third review under the Staff-Monitored Programme one with Zimbabwe and approved a successor SMP covering the periods October 2014 to December 2015.

The SMP provided an important anchor for Zimbabwe's macro-economic policies under difficult political and economic circumstances.

Zimbabwe owes the African Development Bank around $528 million in arrears while the total debt is $726 million.

The country also owes $926 million to World Bank in arrears and a total debt of $1,3 billion while IMF is owed $124 million.

World Bank country economist Mr Johannes Herderschee also said the institution was working to normalise relations with Zimbabwe with a number of studies having been forwarded to assist in policy formulation.

He however, said while this is ongoing Zimbabwe companies need to see how other companies across the globe have responded to the economic slowdown.

"The trend is that there is restructuring taking place across the value chain. Companies and even countries are focusing on one particular product or area which they have an advantage over the others.

"You need to specialise in and have areas where you are not paralleled."

He gave Rwanda as an example of a country which is increasing its specialisation of coffee production.

Mr Herdeschee said Zimbabwe, because of its high skills base could specialise in commercial services.

"You have a lot of accountants here who can always provide services to countries as far as the US. You need to fully utilise your skills and enter into the global market as this is your strongest advantage."

Source: http://www.zimbabwesituation.com/news/zimsit-m-zim-told-to-normalise-relations-with-imf-the-herald/

Original: http://www.herald.co.zw/zim-told-to-normalise-relations-with-imf/

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