IMF not the solution to Zim economic crisis

ZIMBABWE must not pin its hopes for an economic rescue package from the International Monetary Fund (IMF), but should address underlying problems affecting the economy, an official has said.

By Chris Muronzi

In an interview with the Zimbabwe Independent on the sidelines of roundtable discussions held in the capital yesterday, IMF head of delegation Domenico Fanizza said government needs to institute what he described as “ambitious” reforms to get the economy going.

“The engagement process to mobilise financial resources is important, but it’s not the main issue. The main issue is tackling the underlying issues of the Zimbabwe economy such as promoting private sector-led growth and shifting focus from consumption to investment and promotion of greater financial inclusion and allowing the economy to grow,” he said.

“It’s up to government to come up with an economic recovery plan. We are not there to teach, preach and tell people what to do.”

Asked if government was committed to reforms, he said: “The government has indicated that they have taken initial steps to reform and come up with an ambitious programme. We are willing to discuss. It needs to be ambitious.”

Fanizza said the country cannot wait any longer as it had some of the best human capital in the world, adding it was puzzling that the economy has not fared well in the past 15 years.

He said the country has completed preparatory work, with the ball now in government’s court.

“Zimbabwe has capacity to get to the finishing line,” Fanizza said.

Finance minister Patrick Chinamasa said government needed to prove to Zimbabweans that they are good managers, adding the re-engagement process was not a means to an end.

“We don’t need to show the IMF that we are good managers. We need to prove to our people. The IMF is just there to help us with technical skills and play a supervisory role. At the end of the day, we are doing this for ourselves and for our country,” Chinamasa said.

He said the government was now working on a draft country financing programme, but was yet to present it to cabinet.
“We are working on a Draft Country Financing Programme and it has not yet been taken to cabinet. It will turn the economic fortunes of our country,” he said.

“We have a good record. We are not there yet, we are only there to discuss a new financial programme. When you are a customer to a bank and have failed to service your debt, the next time they work with you they want to know if you have the capacity to pay the new money if you get it.We have to enter into skirmishes and they are at policy level and you will have to fight battles and in implementation changing people’s habits is not easy.”

The programme will focus on agriculture and mining as the main sectors of the economy.

Reserve Bank of Zimbabwe governor John Mangudya said Zimbabwe was engaging with the IMF to get financial support, but said the relationship was akin to that of a banker and client.

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