IMF team arrives in Zimbabwe

IMF team arrives in Zimbabwe

• IMF team says Zimbabwe outlook bleak

• Mugabe goes begging in China

• Zimbabwe faces economic meltdown

• IMF further delays Zim expulsion

• IMF shelves Zim expulsion

• 'Gono inflation target achievable' - Standard Bank

• Zim inflation deeps below 450pc

• Zim reports 78pc drop in inflation

• IMF team on surveillance mission in Zim

• Makamba nabbed in corruption blitz

By Staff Reporter

IMF experts arrived Monday to reassess Zimbabwe's economy ahead of a September meeting at which directors are threatening to expel the troubled southern African nation for falling US$295 million (euro242 million) behind in its debt payments.

The three-member International Monetary Fund team was expected to remain in the country between a week and 10 days.

Zimbabwe's agriculture-based economy has been in free-fall since the government began seizing thousands of white-owned commercial farms for redistribution to blacks five years ago.

Inflation has soared to 254.8 percent, unemployment is over 70 percent, and an estimated 4 million people are in need of food aid in what was once a regional breadbasket.

President Robert Mugabe blames sanctions imposed by the European Union and United States for his country's troubles, along with an extended drought. He last year declared: "To hell with the IMF."

Regional powerhouse South Africa has agreed in principle to a bailout package of up to US$1 billion (euro822 million) to prevent Zimbabwe's expulsion at the Sept. 9 IMF board meeting in New York. But officials have remained tightlipped about the terms amid concerns the loan could be seen as rewarding Mugabe and might never be paid back.

The IMF has been pressing Zimbabwe to set a more realistic exchange rate.

At a "managed auction" conducted by the central bank Thursday, the official rate slid from 18,003 Zimbabwe dollars to 24,025 Zimbabwe dollars to the U.S. dollar. The illegal black market rate has dropped below 45,000 Zimbabwe dollars to the U.S. dollar.

Finance Minister Herbert Murerwa called the IMF visit "routine," telling state-run media over the weekend that the team would "assess how the government is resolving certain challenges."

Recent government measures include a relaxation of the state-owned Grain Marketing Board's monopoly over food imports.

In the past three months, the board has imported just 350,000 metric (385,808 US tons) tons of the 1.8 million metric tons (1.98 million US tons) of grain required to see the country through to the next harvest in 2006, its chief executive, Col. Samuel Muvuti, told the state-run Herald newspaper Monday.

Trading was minimal on the Zimbabwe Stock Exchange in the wake of an announcement of a 10 percent withholding tax on all transactions, said ZSE chief executive Emmanuel Munyukwi.

The tax was among a range of measures aimed at boosting government revenue as the budget deficit soared to 8.9 percent of gross domestic product - Associated Press
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