SINGAPORE: IMF & World Bank back Zimbabwe’s debt clearance plan; US official ready to help

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By Staff Reporter & Reuters

FINANCE Minister Mthuli Ncube revealed Wednesday that the International Monetary Fund (IMF) and the World Bank have backed Zimbabwe’s plan to clear to clear $2.2 billion in arrears to international creditors.

Prof Ncube is attending IMF and World Bank meetings in Bali, Indonesia.

“… we held a crucial meeting with co-operating partners and International Financial Institutions to discuss and map the way forward on the country’s Arrears Clearance Road Map,” Ncube said in a statement.

“The meeting was chaired by the World Bank Group and was attended by the all three International Financial Institutions (IFIs), the African Development Bank, the International Monetary Fund and the World Bank Group, Paris Club Group of creditors as represented by the French, the European Union, and other key bilateral partners such as the United Kingdom, United States of America, Australia, Netherlands, South Africa, among others.”

Prof Ncube said he “made a presentation on policy reforms being undertaken by the New Dispensation” focusing on “political and economic reforms being undertaken by Government, especially fiscal consolidation, state enterprises reforms, monetary sector reforms and a road map on arrears clearance”.

Transitional Stabilisation Programme

“The co-operating partners expressed their endorsement for the Transitional Stabilisation Programme (TSP), as it captures adequately the policy reforms that Government is implementing in order to turn around the country’s economic fortunes,” he added.

“In this regard, the international community emphasized the need to judiciously implement the measures as outlined in the TSP.

“They reiterated that implementation of the TSP is crucial for arrears clearance. Furthermore, Zimbabwe’s request for a more accommodative treatment under the Pari Passu principle received positive consideration by the partners.”

The statement continued, “On the other hand the French expressed their support and advised that it is critical that all the Paris Club Group of creditors have consensus in order to fulfil the arrears clearance process.

“It is also important to note that all the cooperating partners and creditors present, uniformly expressed their (support) for Zimbabwe and its arrears clearance Road Map, and that the meeting has been the best so far on Zimbabwe’s arrears clearance process.”

United States obstacle

President Emmerson Mnangagwa has promised to revive the economy, pay foreign debts that the country has defaulted on since 1999 and end the international pariah status that Zimbabwe acquired under Robert Mugabe’s near four-decade rule.

Paying debt arrears could potentially open access to financing from the International Monetary Fund, World Bank and other development institutions, but the United States, which is the bank and fund’s largest member country is an obstacle.

It still maintains sanctions on Harare and is unlikely to support financing for Zimbabwe until the new government makes progress on reforms, including changing laws restricting media freedom and anti-government protests.

Ncube said he met U.S. Deputy Assistant Secretary of the Treasury Eric Meyer.

“In discussions, the US showed that it is a friend of Zimbabwe willing to help. Mr Erick Meyer requested that Zimbabwe see ZIDERA in a positive way which was agreed to by the delegation,” the minister explained.

“Further, the US Treasury undertook to arrange meetings for the Minister in Washington DC with US Congressmen and other think tanks.”

Zimbabwe, which adopted the U.S. dollar after hyperinflation left its own currency worthless in 2009, is again gripped by acute shortages of cash dollars. Prices of basic goods, public taxis and medicines have risen in the last few days.