News / Africa

IMF Unhappy with Zimbabwe Policies

A subsistence farmer stacks her crop of maize in Chivi, southeast of the capital Harare, Zimbabwe, April 1, 2012.
A subsistence farmer stacks her crop of maize in Chivi, southeast of the capital Harare, Zimbabwe, April 1, 2012.
The International Monetary Fund (IMF) said Zimbabwe's large debt remains a serious impediment to the country's financial future. Ruling out retiring Zimbabwe's $10 billion debt, which is what the country's finance minister had hoped for, the IMF report released late Tuesday said Zimbabwe's economy would slow down this year after two years of high growth. Economic analysts said unless the country’s agriculture gets back on track, Zimbabwe’s economy will not stabilize.

The IMF report said Zimbabwe’s high growth rate would slow down to five percent this year because of poor harvests and concerns about upcoming elections that will end the country’s three-year-old fragile coalition government.

The IMF predicted annual growth slowing to about four percent in the years immediately ahead.

Zimbabwe's economy had grown at a 9.6 percent rate in 2010 and a 9.4 percent rate in 2011.

The IMF report

John Robertson from Robertson Economic Information Services sums up the IMF report which said the country's huge debt remains a serious problem.

“The IMF is trying to promote us or prompt us to makes changes," said Robertson. "They do suggest that they want to see changes before they become more generous with their assistance. And they will not be supporting much in the way of assistance to the country until they see change.”

Ahead of the IMF report, Zimbabwe Finance Minister Tendai Biti was hopeful the institution would be lenient on the African country.
 
“We believe that our macro-economic fundamentals are sound, and that there is no reason at all why a positive decision would not be made in our favor," said Biti. "The importance of that IMF decision is that it will enable us to deal with the key issues of arrears that are the hindrance, [as] are sanctions, against Zimbabwe accessing huge levels of capital finance at the World Bank and the African Development [Bank].”

The IMF said Zimbabwe’s debt now stands at about $10.7 billion.

Recently, Zimbabwe's government refused to adopt the Highly Indebted Poor Countries (HIPC) status, which would have resulted in the country mortgaging its mineral resources against its huge debt.

Zimbabwe’s agricultural-based economy took a nosedive in early 2000 when the country embarked on a chaotic and sometimes violent land reform exercise targeting white commercial farmers, seizing their farms, and replacing many of them with peasant farmers. After a decade of decline, the economy has improved somewhat since the creation of a unity government in 2009. But Biti has said the recovery will remain weak and precarious until international institutions such as the IMF retire Zimbabwe’s debt.

The IMF and Zimbabwe's debts

Economist Robertson said the finance minister was wrong to expect IMF to be merciful to Zimbabwe.
 
"I think the clemency issue was not in any sense a write-off or a forgiveness of debt. The IMF does not do that," said Robertson. "They can give terms to countries that have clearly adopted policies that show that the repayments will become possible because of the new policies. But Zimbabwe has not presented any policies changes that seem to suggest to the IMF that would lead us to a better position from which to repay our debts."

The IMF said addressing Zimbabwe’s debt required strong macroeconomic policies and urged Harare to stop non-concessional borrowing and selective debt servicing since that complicates reaching an agreement with creditors. Earlier this month the IMF raised concerns over the failure by Sudan, Somalia and Zimbabwe to honor their commitments to pay their financial debts.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid