Zim to go under IMF SMP after general elections
ZIMBABWE is preparing for an International Monetary Fund (IMF) Staff Monitored Programme (SMP) which will be implemented after the forthcoming harmonised general elections as part of its arrears clearance and debt resolution process.
The Zimbabwe delegation took advantage of the 2023 Spring Meetings underway in Washington, DC to hold “successful” meetings with executive directors and senior management of the IMF and World Bank Group (WBG).
Spring Meetings are gatherings of the joint WBG/ IMF Development Committee and the IMF International Monetary and Financial Committee, where progress on the work of the institutions is discussed.
On Wednesday, Zimbabwe held a “successful briefing” with executives from the global lenders to seek support for its reform agenda and roadmap for arrears clearance.
Head of Zimbabwe Aid & Debt Management Office, Andrew Bvumbe, on his Twitter handle, described the briefing as an “excellent job” by Finance and Economic Development Minister Mthuli Ncube.
“Huge support of our dialogue platform meetings, the reform agenda, and roadmap for arrears clearance,” tweeted Bvumbe.
Mthuli made a presentation to executive directors of the IMF and the WBG.
The presentation focused on recent economic developments, total public and publicly guaranteed debt stock, structured dialogue platform as well as the arrears clearance, debt relief and restructuring strategy.
During his presentation, Mthuli said Zimbabwe had identified three low-hanging fruits for its attempts to have its arrears cleared.
“The low-hanging fruits identified are the forthcoming harmonised elections, resolution of BIPPAs and an IMF Staff Monitored Programme,” reads part of Mthulu’s presentation seen by Business Weekly.
Mthuli said: “The success of the implementation of our reform agenda will critically depend on ‘wet’ SMP for Government,” reads part of the presentation.
A “wet SMP” might include incentives for efforts on reforms, while mitigating social impacts on the vulnerable.
According to Mthuli, Government has identified five priority areas that would require funding during the SMP implementation period: education, social protection, health, agriculture and climate change.
He said funds could be mobilised under a Multi-Donor Trust Fund, to be managed by the AfDB or the World Bank. On the resolution of BIPPAs, Mthuli said government has started to engage directly with Germany, Switzerland and Netherlands.
On debt resolution and arrears clearance process, Mthuli said the Zimbabwe appointed debt Champion, Dr Akinwumi Adesina and the HighLevel Facilitator and former Mozambique President Joaquim Chissano will visit some of the Capitals for direct engagements.
“Government of Zimbabwe will also shortly conduct deeper and direct bilateral engagements with the Capitals: Washington DC, London, Brussels,” said Mthuli.
He also said Sector Working Groups on Economic and Governance (SWGs) would need to finalise the reform matrices, and streamline and align the indicators to the NDS1 and ZIDERA.
At the same time, development partners are expected to be consulting their headquarters/capitals on the three reform matrices.
The southern African country hopes arrears clearance, debt relief and restructuring will ensure sufficient resources for economic recovery, especially concessional support from bilateral development partners and creditors, including IFIs.
The external debt burden is weighing heavily on the country’s development needs and will continue to have a detrimental influence on the country’s capacity to accomplish the SDGs targets, particularly in health, education, and social protection, and to reduce extreme poverty levels.
The country’s ability to achieve its inclusive economic development goals, particularly infrastructure investments and climate change mitigation and resilience, will be hampered by a lack of access to international financial resources to finance Zimbabwe’s economic recovery and NDS1 priority projects and programmes, according to Mthuli.
Zimbabwe’s total Public and Publicly Guaranteed debt amounted to US$17.6 billion as at end of December 2022.
Total external debt stood at US$14.04 billion, of which arrears, including penalties amount to US$6.35 billion.