THE Paris Club has demanded that Zimbabwe pay its outstanding arrears to creditor countries and restore relations with the International Monetary Fund (I
MF) and the World Bank for it to qualify for debt forgiveness.
The demand by the Paris Club, the first from the organisation since Zimbabwe defaulted on its external loan repayments in 1999, comes against a background of increasing resistance by government to a planned visit by an IMF mission for routine Article IV consultations. Zimbabwe has a foreign debt stock of about US$4 billion.
The Paris Club is an informal grouping of creditor governments from major industrialised countries.
The Paris Club’s demands are understood to have been communicated to Finance minister Herbert Murerwa in a letter dated October 4.
The letter was signed by Ambrose Fayole, the co-chairman of the Paris Club, according to government officials in the Ministry of Finance.
In the letter, the IMF urged Zimbabwe to clear outstanding arrears and “normalise your relations with the IMF and the World Bank which is a prerequisite for Paris Club treatment”.
Sources indicated that the communication from the club highlighted growing concern over possible plans by Zimbabwe to give up its membership of the IMF after failing to win back voting rights.
The Zimbabwe Independent reported in July that government was planning to block an IMF Article IV consultation mission to Zimbabwe initially scheduled for September after failing to reclaim its full membership of the Bretton Woods institution.
The mission failed to make the visit after it was unable to agree dates with Harare, but there have been reports suggesting the mission could visit at the end of the month before an IMF board meeting in early November.
The board meeting, meant to discuss Zimbabwe’s compliance with IMF recommendations on the reform of economic policies.