HARARE — Zimbabwe's finance minister said on Thursday the country will stick to an IMF monitoring program that could pave way for the country to clear its debts, as the economy grapples with chronic power cuts and a crippled manufacturing sector.
Zimbabwe is still emerging from a decade of economic decline and hyperinflation, but the economy is stuttering in the aftermath of a disputed election in July that has extended President Robert Mugabe's 33-year rule.
Harare began an International Monetary Fund-led staff-monitored program in June, which, if successful, could help it clear $10 billion in external debts and give it access to new credit from international lenders.
Under the program, which is set to run until December, it is expected to implement a raft of economic reforms.
“We are committed to the program,” Finance Minister Patrick Chinamasa told Reuters on Thursday.
He said he will travel to Washington this weekend to assure IMF officials there that Harare will continue with program.
Consumers in the southern African nation have experienced electricity blackouts lasting up to 16 hours a day in recent weeks, which state-owned power utility ZESA attributes to maintenance work on its aging power generating plants.
Energy and Power Development Minister Dzikamai Mavhaire said this week the only long-term solution to the power crisis was to invest in new plants, which will require billions of dollars and take time to build.
Zimbabwe has a peak demand of 2,200 megawatts of electricity, but only has a supply of 1,167 MW, including imports from Mozambique.
The electricity crunch has hit the manufacturing and agriculture sectors, where output has fallen although mines have largely been spared. Zimbabwe has the second-largest platinum reserves in the world after South Africa, as well as one of the biggest diamond deposits and large quantities of coal and gold.
“We are in the intensive care unit,” local media quoted Charles Msipa, head of the Confederation of Zimbabwe Industries as saying at the Wednesday launch of a report on the state of manufacturing, which showed many firms were operating at one third of capacity.
“Capacity utilization is declining, in some accounts by alarming margins, leading to downstream effects like retrenchments and reduced activity on the domestic economy,” he said.