a six member delegation from the International Monetary Fund (IMF) led by Gene Leon jetted into the country this week for crucial meetings to revive the Staff Monitored Programme (SMP), which stalled after government failed to meet some targets that had been agreed on.
The SMP is an informal arrangement between the government and the IMF to monitor the implementation of key economic programmes in the country. It does not entail financial assistance.
The SMP, which is supposed to run until March next year hangs in the balance as government’s profligate spending, particularly its payments to Sakunda Holdings, has thrown the programme into disarray.
Government officials told businessdigest that the IMF delegation will meet fiscal and monetary authorities.“The mission has started and they are meeting ministry of Finance and Reserve Bank of Zimbabwe officials,” an official revealed.
“They will be in the country until next week.” They will also be discussions over the humanatarian situation in the country.” In a recent interview with AMH chairperson Trevor Ncube on his platform In Conversation with Trevor, Finance ministry permanent secretary George Guvamatanga pointed out that government was holding negotiations with the IMF with a view to continue the SMP.
He said although government acknowledged its mistakes, particularly on inflation and money supply growth, they had met most of the targets set by the Bretton Woods institution.
The IMF has projected that the economy will contract by over 7% by the end of the year. The meeting comes at a time the country’s economic crisis has deepened, characterised by an acute foreign currency shortage, low capacity utilisation of less than 30%, in manufacturing rolling power cuts of up to 18 hours and runaway inflation which has breached the 400% mark.
The three-digit inflation has severely eroded incomes resulting in doctors going on strike in September. The doctors are demanding to be paid at the interbank rate which has been rejected by government, creating the prolonged standoff resulting in the firing of some of the doctors.
This has been worsened by the notice by civil servants recently that they will not be able to report for duty because of incapacitation. The government workers are demanding payment of minimum salaries of US$475 at the interbank market rate.