Zimbabwe Announces Desire For A New IMF Staff-Monitored Program

Zimbabwe’s finance minister, Mthuli Ncube, has announced the country’s desire to establish a new staff-monitored program with the International Monetary Fund (IMF) by April next year.

An IMF team is scheduled to visit Zimbabwe later this month for initial discussions. Speaking during the IMF and World Bank Annual Meetings in Marrakech, Ncube stated that their goal is to finalise the staff-monitored program before the Spring Meetings in April 2024. Reuters quoted him as saying:

Our intention is that by the time we go for the Spring Meetings in April 2024 we should have signed off on a staff-monitored programme.

It will focus on maintaining discipline on the fiscal front and continue fine-tuning our exchange rate system and maintaining a tight monetary policy.

IMF staff-monitored programs involve close monitoring of the country’s economic plans by IMF staff. This program could potentially lead to future financial arrangements. Zimbabwe’s economy has been heavily impacted by inflation, and its ability to access long-term international capital is hindered by substantial arrears on debts owed to foreign lenders.

In 2019, the IMF approved another Staff-Monitored Program (SMP) to support Zimbabwe’s reform agenda, focusing on macroeconomic stability, re-engagement with the international community, and improving the business environment. Structural reforms, including privatising state-owned enterprises and enhancing governance, were initiated.

In May 2023, Zimbabwe projected to implement another SMP in the last quarter of the year as part of the arrears clearance and debt resolution process. The negotiations involved a three-pronged strategy, including economic reforms and addressing compensation for white former commercial farmers affected by the Land Reform Programme.

The Finance Minister stated that implementing the IMF’s SMP is crucial for development partners to assist Zimbabwe in finding a financier to clear the country’s arrears. The SMP needs to be financed to be effective. Zimbabwe expects partner support in important areas such as agriculture, food security, climate change, social protection, health funding, and education sector funding.

Ncube also stated that the government had reached compensation agreements with some white farmers whose lands were seized two decades ago during the Fast Track Land Reform Programme. According to Minister Ncube, individual farmers have agreed to the payment plan and are satisfied with signing the agreement with the government. Zimbabwe plans to pay the farmers $3.5 billion over a period of ten years, which is a shorter timeframe compared to the previously announced 20 years. This compensation is a crucial part of the government’s strategy to clear arrears, developed in collaboration with the African Development Bank.

More: Pindula News