IMF team leaves Zimbabwe ahead of board meeting

IMF team leaves Zimbabwe ahead of board meeting

• Zimbabwe reveals source of IMF payments

• Zimbabwe pays IMF US$120 million

• IMF team still locked in Zim talks

• IMF team in Zimbabwe for talks

• 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

A FOUR-MEMBER International Monetary Fund team, in Zimbabwe to study the country’s troubled finances, left on Friday ahead of a board meeting next week that could result in Zimbabwe’s expulsion from the fund for nonpayment of arrears.

Government officials were in buoyant mood following Zimbabwe’s sudden repayment on Monday of $120m of its $293m arrears due since 1999.

But independent economists were more pessimistic, and there was speculation about how the cash-strapped government managed to find the money as negotiations on a loan from SA have dragged on without results.

Professor Anthony Hawkins of the University of Zimbabwe Business School predicted the IMF delegation’s report would be "very gloomy."

The board meets September 9 to discuss Zimbabwe’s debt and its failure to agree to restructuring measures or cap state spending.

Zimbabwe owes some $2.6bn to international institutions.

Hawkins said that Gross Domestic Product could fall as much as 7% and inflation would likely top 400% by the end of the year. The government had hoped for 2% growth and inflation below 80%.

Hawkins said Tuesday’s repayment was "all about face and image" and would not elicit further lending from international institutions, to which the country owes a total $2.6bn.

"It doesn’t make sense. If we have $120m to spare we should be using it to import food and other things we need, especially if the IMF is not going to give us anything," he said.

The United Nations estimates that 4 million Zimbabweans need urgent food aid to survive to the next harvests in April in an economic crisis worsened by the government’s recent clampdown on urban dwellers and street traders.

Production and exports from the country’s major traditional earner, agriculture, have crashed since President Robert Mugabe, ordered violent seizure of 5,000 white commercial farms in February 2000. Under a constitutional amendment passed by Parliament on Wednesday, not only whites but all property owners were stripped of already limited rights of appeal to the courts against expropriation.

SA last month agreed to an unspecified loan to the government, but talks have not yet been concluded.

There is media speculation that Mugabe cannot agree to the economic and political preconditions set by President Thabo Mbeki.

Hawkins said he believed SA was not prepared to continue as-yet inconclusive talks on an economic bailout unless Zimbabwe avoided being expelled from the IMF.

He said questions remained unanswered about the source of the $120m, he said. Some had come from corporate foreign currency accounts, liquidated prematurely by the Reserve Bank.

Exporting companies were normally permitted to hold foreign currency earnings for up to a month, but the reserve bank reportedly commandeered funds immediately to help pay the IMF, although this was unlikely to account for the whole sum repaid.

"No one believes they (the government) got $120m there," said Hawkins - afp
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