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Chinamasa pleads for IMF help, almost
08/11/2013 00:00:00
by Business Reporter
 
Urging IMF rethink ... Patrick Chinamasa
 
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FINANCE minister came short of begging the International Monetary Fund (IMF) to advance lines of credit to the country when he asked them to be “open minded with the unique situation that Zimbabwe finds itself”.

Chinamasa said this after briefing the IMF delegation that has arrived in the country on Wednesday. Zimbabwe is hopeful it will fulfil the set targets on the IMF supervised economic reform programme.

In June, the IMF agreed on a Staff Monitored Programme (SMP) on Zimbabwe that will run until December with the country setting itself some benchmarks that have to be attained during the tenure of the supervised programme.

The government has so far missed a June 30 deadline of ensuring that diamond revenue from Marange flows into Treasury.

Authorities had told the IMF that they would issue a Statutory Instrument by the end of June 2013 that establishes a clear formula for the calculation and remittance of any dividends to government from gem mining entities it holds shares in.

“The message we are conveying to the IMF is that they should be open minded with the unique situation that Zimbabwe find itself.  They should have some flexibility in particular, of course we are saying we would abide by the staff monitoring programme but would wish for injection of new money,” said Chinamasa.  

The minister emphasised that the main financial cost would be to continue to not be able to access new loans from lenders.

Government promised the IMF that it would submit to cabinet amendments to the Precious Stones Trade Act to incorporate the principles contained in the Diamond Policy. The amendments would be presented to Parliament by end of December.

Officials told the IMF it would submit a bill before parliament meant to take over the debt owed by the Reserve Bank of Zimbabwe (RBZ). The central bank owes creditors over US$1,1 billion.

Zimbabwe has been working on a re-engagement programme, building bridges with international financial institutions, to help finance the growth of the economy on the increase since the use of multiple currencies in 2009.

However, the re-engagement exercise has been dampened by the over US$10,7 billion external debt to creditors including multilateral institutions.

The country’s debt to multilateral financial institutions means that it cannot access cheap funds on the international financial markets.



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Chinamasa said one of the easier options was for the creditor institutions to fund the country’s productive sectors so as to create an environment conducive enough to repay the debts.  

At the moment, government was making token payments of between US$150,000-US$200 000 to clear its arrears but Chinamasa said it would take “a million years” at that rate to repay the whole amount.  


 
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