The Zimbabwe Treasury should immediately pay off International Monetary Fund (IMF) arrears using Special Drawing Rights (SDR) funds in an escrow account with the multilateral institution so that Zimbabwe can start accessing cheap developmental financing from Bretton Woods institutions and the Paris Club, parliament heard yesterday.
Former Reserve Bank advisor and Bikita West MP Munyaradzi Kereke told the National Assembly during debate on the 2014 budget that Zimbabwe was deliberately allowing itself to be abused by Western powers by not paying off IMF arrears when it had the capacity to do so.
“The reason we are ill-treated is because we allow ourselves to be treated that way,” Kereke said, “Treasury should trigger the release of our SDR balance to settle the IMF arrears in full and then make our case since no instrument can be used to stop us using the funds in the escrow account to pay our loans.”
The IMF in 2009 released a US$520million SDR fund to each member state to curtail the international financial recession and liquidity crunch but held on to some of Zimbabwe’s money since the country owed the institution US$144million in arrears. The payment of IMF arrears will help Zimbabwe access cheap and concessionary developmental funding from the twin Bretton Wood institutions and the influential Paris Club.
The Paris Club usually takes its cue from the IMF. Kereke further argued that government could assist the financial sector thrive once more by developing a deliberate policy of evenly distributing its deposits among banks.
Many indigenous banks are facing a severe liquidity crunch. “Fair distribution of deposits by government and its agencies like NSSA across the banks will help in invigorating them. This can act as a deliberate financial market stabilisation tool,” he said.
Kereke pointed out that government should not be persuaded by industry to impose punitive import taxes but the industry should make sure it improves its production technology to be competitive. He also called for the demystifying of diamond revenue which he said was seeping through holes created by a coterie of dealers and middle persons.