HomeBusiness DigestStill no IMF boss in Zimbabwe

Still no IMF boss in Zimbabwe

Ngoni Chanakira

THE International Monetary Fund (IMF)’s senior resident representative Gerry Johnson whose term of office expired in November has still not been replaced.

“Verdana, Arial, Helvetica, sans-serif”>Johnson returned to Washington after a rocky stint in Zimbabwe.

“We still do not have a replacement,” an IMF employee said. “We don’t know anything about the replacement right now. We are not allowed to talk to the press.”

Relations between Zimbabwe and the Bretton Woods Institutions – the IMF and World Bank – were not rosy during Johnson’s tour of duty.

In fact, they were at an all-time low ever since President Robert Mugabe decided to embark on the fast-track land resettlement programme three years ago.

While Mugabe points out that his government was compelled to distribute tracts of land to the country’s “landless peasants”, the IMF, World Bank and major international organisations including the influential European Union (EU) blasted the way this was done.

They said while the idea was noble, the recipients were mainly government officials and their family members as well as executives with close links to the political class.

In an interview before he left Johnson said: “I think the announcement of who will take over from me will come from Washington as soon as I get there. Right now I do not know who will replace me. I have enjoyed my stay here and learnt a lot.”

Under IMF protocol Johnson could not openly express his feelings about the situation on the ground in the country but could refer to Article IV Consultations concluded with Zimbabwe.

On June 6 the IMF suspended Zimbabwe’s voting and related rights after having determined that the country had not sufficiently strengthened its cooperation with the Fund in areas of policy implementation and payments.

The last IMF Article IV Consultation report on Zimbabwe made shocking reading and riled government so much that Mugabe told his high-ranking officials to ignore the IMF and World Bank and concentrate on countries in the Far East for economic aid and advice.

Mugabe openly said his government had dumped the Bretton Woods institutions because they were the major culprits bringing “untold economic suffering” to the nation.

New Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has however said he will be re-engaging the IMF and World Bank for Zimbabwe to get back on a better economic position.

Gono says the country desperately needs the much-needed balance of payments support that was suspended by the Bretton Woods institutions resulting in a crippling foreign currency shortage in Zimbabwe.

Gono is soon expected to visit the IMF headquarters in Washington to “defend” his Monetary Policy Statement which had some input from the IMF and World Bank.

Insiders told businessdigest that the IMF and World Bank had sent a five-paged document spelling out what they would look for in Gono’s statement.

They said the governor had complied with some of it.

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.

A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies.

On return to headquarters, the staff prepares a report, which forms the basis for discussion by the executive board. At the conclusion of the discussion, the managing director, as chairman of the board, summarises the views of executive directors and this summary is transmitted to the country’s authorities.

On June 6 the IMF report on Zimbabwe resembled the script of a horror movie.

It pointed out that the economic crisis reflected to a large extent “inappropriate economic policies, loose fiscal and monetary policies, the maintenance of a fixed exchange rate in an environment of rising inflation and administrative controls”.

The IMF said increased regulations and government intervention had driven economic activity underground and contributed to the chronic shortages of goods and foreign exchange.

“The impact of these policies have been exacerbated by the fast-track land reform programme, recurring droughts and the HIV/Aids pandemic,” the IMF report said. “Meanwhile, investor confidence has been eroded by concerns over political developments, weak governance and corruption, problems related to the implementation of government’s land reform programme, the push for an increased indigenisation of the business sector and the selective enforcement of regulations.”

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