While Zimbabwe is moving in the right direction as far as garnering international financial support, the IMF has decided to put a hold on pouring funding into the country, according to Voice of America.
Domenico Fanizza, The International Monetary Fund’s (IMF) assistant director and head of the most recent Zimbabwe IMF Delegation review, classified the country as being deb-distressed. The report noted that until Zimbabwe’s external debt is paid down — currently in the amount of $10 billion — the IMF will not offer further funding.
The government of Zimbabwe is focused on earning new loans to cover the majority of the budget overages.
“Our intention is that by this time next year, we should be entering the new phase of clearing our arrears and opening floodgates of development financing, FDI and other financial flows that will stimulate economic growth and reduce poverty in our country,” finance minister Patrick Chinamasa said in the report.
“Until we clear our arrears, we are not in a situation that we are able to engage creditors for fresh money.”
According to Fanizza, the road to financial recovery for Zimbabwe includes confidence restoration of financial institutions, an improved investment climate and a balanced budget. He also mentioned sticking to a legitimate plan for acknowledging and paying down debts owed to multinational institutions.
Another report by The Herald revealed that in addition to $10 billion in external debt, last fall domestic debts tallied up to $1.1 billion. Local business have long began to feel the pinch as measures to liquefy assets have been met by as slump as has production — especially within the agriculture sector. Fertilizer manufacturers are among those suffering the most.
“Our industry is currently in a bad state due to lack of funding but as you heard from the RBZ Governor Dr (John) Mangudya’s monetary policy statement, the central bank will have to play a critical role of sourcing funds for Government to revive the industry,” Mike Bimha, Industry and Commerce minister said in The Herald Report.