Zim to disclose terms of SA loan

Godfrey Marawanyika

FINANCE minister Herbert Murerwa and Reserve Bank of Zimbabwe governor Gideon Gono will today meet the International Monetary Fund (IMF) delegation and perhaps explain the status of South

Africa’s R6,5 billion loan to Zimbabwe.


The meeting comes ahead of a September 9 deadline by the IMF executive board to consider Harare’s continued membership of the fund.


The three-member delegation, which came into the country this week, comprises Sharmini Coorey (head of delegation), Sonia Munoz, an expert on monetary and balance of payments, and Kevin Fletcher, a fiscal policy expert.


Coorey and Munoz were in the country last month during Article IV consultations, which found that Zimbabwe’s financial position was far from sound.


The trio is expected to head back to Washington on Monday and make a formal report on their findings.


The findings will be incorporated in the executive board’s final decision on Harare’s continued status with the international financier.


On Monday, the delegation met with Ministry of Finance and central bank representatives to review the country’s balance of payments and external financing.


The R6,5 billion is part of external loans and Gono and Murerwa have to disclose the terms to the IMF team.


The loan is expected to be disbursed in phases, with the first tranche of US$160 million being used to settle just half of the country’s US$295 million debt to the international financier.


At least US$160 million will be sufficient to save Harare from expulsion, but will not necessarily open lines of credit with the IMF and the World Bank.

The country’s external arrears amount to US$4,5 billion.


Washington officials said the Coorey delegation was expected to ask about the loan issue since part of the money would be used to offset Zimbabwe’s debt.


Since last month, a Zimbabwean team of experts from the central bank and the Ministry of Finance has been shuttling between Harare and Johannesburg to negotiate the disbursement of the loan.


On Tuesday, the IMF met with central bank officials to review the monetary, exchange rate regulations, forex inflows, and the auction system.


However, while acknowledging discussions between himself and the Zimbabwean team, on Wednesday South African central bank governor Tito Mboweni disputed the reported $1 billion loan, saying it was a media creation. “Yes, there have been discussions about that, and the discussions are nowhere near a billion dollar facility.”


Loan discussions involving himself, Finance minister Trevor Manuel and their Zimbabwean counterparts were not yet concluded, Mboweni said.


“The discussion really has centred around what policies need to be undertaken in Zimbabwe to help boost economic performance, control inflation, bring about a more stable exchange rate and improve the production sector of the economy.”

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