World Economy

IMF Warns Zimbabwe: No Reforms, No Money

IMF Warns Zimbabwe: No Reforms, No Money
IMF Warns Zimbabwe: No Reforms, No Money

The International Monetary Fund has insisted that President Robert Mugabe’s government will not receive any fresh capital until it repays all its debts and implement key economic reforms.

This was after the cash-strapped country last week cleared its 15-year-old $107.9 million arrears to the international money lender prompting the government to think it was now closer to getting new financial assistance from the IMF, Yahoo reported.

However, IMF spokesperson Gerry Rice on Friday said the cash-starved and drought-stricken nation was still miles away from accessing new loans.

“The clearance of those arrears with the World Bank, the African Development Bank, the European Investment Bank, and others would be an important consideration for us in terms of moving forward with any support, any possible support for Zimbabwe,” he said.

“The settling of their arrears with the fund, as you say, does not automatically provide Zimbabwe with access to IMF financing,” Rice added.

The IMF spokesperson noted that there were a number of steps that need to be taken before Zimbabwe qualifies for loans. “It requires a decision by our board to lift the remaining remedial measures that had been imposed on Zimbabwe because of the arrears,” he said during a media briefing.

The IMF’s executive board will only release its financial choke-hold once Zimbabwe pays off $601 million to the African Development Bank, $1.1 billion to the World Bank, and $240 million to the European Investment Bank.

Zimbabwe, which is gripped by drought and possibly on the verge of total economic collapse, was recently awarded a $91.2 million package by the IMF that had been held for seven years pending the settlement of arrears to the financial institution.

Bretton Woods institutions, including the World Bank, the IMF and African Development Bank, froze their financial assistance to Zimbabwe in 1999 when the nation defaulted.

Western governments also imposed sanctions on Harare in 2001 over allegations of vote-rigging and human rights abuses.

In 2014, the IMF stated the government needed to pay off its arrears and restore confidence by implementing economic reforms, social development and poverty eradication programs if it was to be awarded financial assistance to avoid an economic catastrophe.

It has now emerged that, after drawing down its special drawing rights holdings held at the IMF, Mugabe’s government was able to clear $107.9 million of arrears to the fund’s Poverty Reduction and Growth Trust, and was granted access to $91.2 million.


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