Debt blocks access to financial support

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ZIMBABWE’S high external debt profile is responsible for the country’s inability to access to International Monetary Fund (IMF) cash facilities, the organisation revealed last week.
The IMF approved a Staff-Monitored Programme (SMP) for Zimbabwe covering April to December 2013 but said the programme would not include financial support.
An SMP is an informal agreement between country’s authorities and fund staff to monitor the implementation of economic programme. SMP agreements do not entail financial assistance or endorsement by the Fund’s Executive Board.
The SMP is Zimbabwe’s first IMF agreement in more than a decade.
In a statement, the Fund said Zimbabwe’s external debt was in arrears, cutting it off from accessing most external financing sources.
“In particular, Zimbabwe remains unable to access IMF resources because of its continued arrears to the Fund,’’ it said.
The Fund urged the government to evolve a method of maintaining macro-economic stability and implementing reforms as well as a comprehensive arrears clearance strategy.
“This should be supported by development partners, it will really be essential for resolving Zimbabwe’s large debt overhang.
“A successful implementation of the SMP would be an important stepping stone toward helping Zimbabwe re-engage with the international community,’’ it said.
The statement said the country had however, made considerable progress in stabilising the economy since the end of hyper-inflation in 2009.
“Since then, GDP has grown by an average of over seven per cent and inflation has remained in the low single digits, thanks largely to the multi-currency system.
“Government revenues have more than doubled from 16 per cent of GDP in 2009 to an estimated 36 per cent of GDP in 2012, allowing the restoration of basic public services,’’ it said.
The SMP focuses to put public finances on a sustainable course, while protecting infrastructure investment and priority social spending.Advertisement