IN an unprecedented shift in aproach, the usually diplomatic International Monetary Fund (IMF) has flagged corruption in government and internal succession wrangles in the ruling Zanu PF party as some of the issues which need addressing outside macroeconomic factors buffeting the economy.
The IMF said Zimbabwe’s deteriorating economic conditions reinforce the urgency to move forward and implement comprehensive ambitious reforms to transform the economy, and to advance the re-engagement process with the international community.
The Bretton Woods institution has identified the reduction of the public service wage and rebalancing the budget towards infrastructure investment and social outlays to stimulate growth, as critical in addressing Zimbabwe’s daunting economic challenge
“…Further steps are needed to accelerate the reform of state-owned enterprises, strengthen public financial management, and enhance transparency in the mining sector. Other priorities include improving the investment climate, tackling corruption, and promoting economic diversification,” said the IMF following its conclusion of Article IV Consultations on Zimbabwe and third review of the Staff Monitored Programme.
Zimbabwe has over the years been ranked as one of the most corrupt countries in the region.
The country continues to fare dismally in a major global corruption index. It was ranked 150 out of 168 countries in a 2015 survey published by Transparency International published early this year.
The IMF said there was need to improve accountability in parastatals and state-owned enterprises to ensure that the entities contribute significantly to treasury.
“Staff emphasised the importance to accelerate the reform of SOEs to reduce their budgetary impact, improve service delivery and accountability, and enhance their contribution to economic growth,” the IMF report further reads.
“Forensic and performance audits are being conducted on most of the ten largest SOEs targeted for priority action to determine the appropriate restructuring policies, and employments costs have already been reduced in a number of them. For some of the 10 enterprises targeted for priority action, the authorities plan to seek strategic and technical partners, pursue joint ventures, or unbundle them.”
Government has identified several parastatals currently in loss-making positions for transformation. The concluded forensic and performance audits at Grain Marketing Board and Cold Storage Company, and the four turnaround strategies under consideration by cabinet (Industrial Development Corporation, Zimbabwe National Water Authority, Agriculture and Rural Development Authority, and TelOne) according to the IMF will provide the baseline for appropriate restructuring policies.
IMF is also concerned with infighting in Zanu PF, although it noted that the political situation was stable.
“Zimbabwe’s political situation appears broadly stable, but with rising rivalries within the ruling Zanu PF party. Infighting has intensified, with suspensions and expulsions from the party and the cabinet along factional lines since December 2014,” noted IMF.
“A new opposition party led by former vice-president Joice Mujuru, with support from some of those expelled from the Zanu PF party, was launched in early-March 2016. Presidential and legislative elections are scheduled for 2018.”