AN International Monetary Fund (IMF) mission to Zimbabwe has extended by a day key talks on the southern African nation’s debt arrears which could lead to its expulsion from the lending body.
“We have decided to continue the talks tomorrow (Tuesday) and after they are co
ncluded, the mission will remain in Zimbabwe until Friday,” an IMF spokeswoman in Washington told AFP.
She said the team “will finalise their final report that will be put before the board before its meeting on the September 9”.
Zimbabwe’s Finance Minister Herbert Murerwa earlier yesterday said week-long talks with IMF, which is mulling expelling Harare for debt arrears, were by no means over.
“The talks are continuing,” he told AFP after meeting with IMF officials. “When we are finished, we will let you know and issue a statement.”
Officials from the lending arm of the World Bank began talks with Zimbabwean officials last Monday over debt arrears totalling $US300 million dollars (about $7,2 trillion) million).
Murerwa refused to comment on a South African media report suggesting that Zimbabwe would be given until September 9 to pay or face the boot, saying: “How can they say that when we are still talking?”
South Africa earlier this month agreed to step in with a loan to ensure that its neighbour retained its IMF membership.
Talks held in Pretoria recently reportedly yielded a tentative agreement on a loan of between $US200 to $US500 million including about $US100 million to be paid to the IMF.
A source in the IMF mission in Harare told AFP that the talks were not only about repaying the money but also focussed on IMF demands that Harare limit and restructure public spending.
“It’s not only payment but policies as well,” the source said.
Zimbabwe’s economy has shrunk by 30 per cent in the past four years after the seizures in 2000 of about 4500 white-owned commercial farms which sent agricultural production plummeting.
President Robert Mugabe’s government has blamed drought and sanctions by the European Union and the United States for the country’s economic decline, characterised by triple-digit inflation and high unemployment.
Murerwa recently presented a supplementary budget to pay wages, import food and build new housing, after admitting that targets for economic growth and inflation would be missed.
Inflation, already hovering at 164,3 % in June, shot up to 254,8% in July, dealing a blow to the government’s goal of bringing inflation down to 80 % by year end.
The government is also spending on a housing reconstruction in the wake of an urban cleanup campaign in which shacks, market stalls, shops and homes were demolished.