FOR the first time since 1999 when Zimbabwe severed ties with the International Monetary Fund (IMF), the fund has said that the country needs to mend relations with the international comm
unity, creditors and donors.
In its review for the sub-Saharan Africa Region Economic Outlook held on Friday last week, Siddharth Tiwari, deputy director for the African department, said Zimbabwe needed to adopt new policies to help the economy.
“These policies include macro policies, obviously, but it is clear that structural reforms, more pointedly land policy, is also at the heart of this. And without, broadly, these two sets of policies, it’s going to be very difficult to move ahead in Zimbabwe,” he said.
“The second thing Zimbabwe needs to do is to reintegrate itself in the international community, the donors and its creditors. It’s a two-way street. Zimbabwe needs to move and the donors would need to move.”
The latest comments by the IMF come at a time when President Mugabe a fortnight ago attacked the IMF saying it was spreading lies against the country.
In May this year the fund predicted that the country’s economy might post a positive gross domestic product.
Tiwari said over the past four to five years, the country’s output had declined by 30%, with inflation in the region of 300% to 400%.
Currently the country’s inflation is 314,4%, down from a high of 623% attained in November last year.
Tiwari said they had closed the Harare office largely due to budgetary constraints.
“Offices are opened where value addition is the most. And at this moment the decision, which was made 12 months back, was that, relatively speaking, resources could be used more efficiently elsewhere.”
Since 2000 when the country was slapped with targeted sanctions by the European Union and the United States, Harare has been maintaining a hardline stance, insisting she can do without the help of the international community.
But this appears to be slowly changing as evidenced by acting Finance minister Herbert Murerwa’s trip to Washington last week in a bid to mend relations with the IMF.
Murerwa was accompanied by Reserve Bank governor Gideon Gono on the tour.
Zimbabwe currently owes the IMF Special Drawing Rights (SDR) 188 million.
Although the debt has declined from SDR301 million as of December last year, it is still too high for a country that has limited export earnings and has been virtually reduced to a pariah state.
A fortnight ago, the fund also noted that Zimbabwe’s banking sector was very unsafe.