ALTHOUGH the International Monetary Fund (IMF) has deferred Zimbabwe’s suspension by six months, the institution has raised concerns over issues pertaining to governance and human rights
which it says kill investor confidence.
In its executive board report, the Bretton Woods institution said the disorderly implementation of the land reform had contributed to a sharp drop in agricultural output.
“Concerns about governance and human rights, and the continued lack of clarity about property rights have severely damaged confidence, discouraged investment and promoted capital flight and emigration,” the report said.
The failure to respect property rights in 2000 led to the resignation of former Industry and International Trade minister Nkosana Moyo over factory invasions spearheaded by war veterans.
The IMF’s decision not to suspend Zimbabwe gives the country an opportunity to strengthen its cooperation with the Washington funder, the report said.
In the report the IMF noted unemployment was still very high and was increasing. The report said social conditions which were once among the best in Africa had worsened, with the widespread HIV/Aids pandemic remaining largely unchecked.
“Severe food shortages have necessitated massive food imports and donor assistance,” the report said.
The IMF directors attributed these developments to inappropriate macro-economic policies and structural changes that weakened the economic base.
The country has been in continuous arrears to the IMF since February 2001. As of last month Zimbabwe’s arrears to the fund amounted to US$295 million.
Although the country has so far made payments totalling US$9 million, the IMF directors said that was insufficient to stabilise the arrears.