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IMF team to visit Zimbabwe next week
Dumisani Muleya, Business Day (SA)
September 21, 2006

http://www.businessday.co.za/articles/world.aspx?ID=BD4A275627

AN INTERNATIONAL Monetary Fund (IMF) team is expected in Harare next week to assess Zimbabwe’s economy after the country was singled out as the weak link in regional growth.

During the IMF-World Bank meetings in Singapore that ended yesterday, Zimbabwe was singled out as the stumbling block in regional economic growth and development.

Official sources confirmed that an IMF team would be in Harare next week on an Article IV consultative mission. It is expected to highlight the worsening political and economic situation in its post-visit report.

Zimbabwean Finance Minister Herbert Murerwa will announce the date of the visit when he returns from Singapore today. He was expected to hold private talks with IMF officials before leaving.

Zimbabwe has been reluctant to allow the IMF back since its last visit in March because the government fears it will intensify criticism of its policies, which have driven the economy to ruins, sources say.

Harare’s worst fears were realised at the weekend when the IMF hauled the government over the coals for its damaging economic policies.

Siddharth Tiwari, the IMF African department’s deputy director, said on Saturday Zimbabwe had experienced six years of cumulative decline that had left the economy near collapse.

Zimbabwe had faced six years of continuous output decline, a rise in prices at high rates over several years, increased poverty, failing public services, and rising HIV/AIDS rates, Tiwari said.

An IMF report last week said inflation was expected to reach 4000% by the end of next year.

"It is a tragic situation, frankly, and prospects are grim; they are not bright. While financing will be helpful to Zimbabwe, fundamental changes in economic policies are needed," Tiwari said.

The IMF has urged Zimbabwe to adopt a comprehensive package of sustained structural reforms to rescue its economy.

When the IMF last visited Harare in March, it said Zimbabwe’s economic crisis called for "urgent implementation of a comprehensive policy package comprising several mutually reinforcing actions in macroeconomic stabilisation and structural reforms."

Although Zimbabwe earlier this year settled its arrears with the IMF’s General Resources Account, it still owes about $119m to the Poverty Reduction and Growth Facility-Exogenous Shocks Facility Trust Fund.

The move resulted in IMF MD Rodrigo de Rato stopping the fund’s push for the country to be expelled. But the IMF refused to lift other sanctions on Harare, such as the suspension of its voting rights and a ban on using the organisation’s general resources.

Tiwari said there was "substantial goodwill" to help out Zimbabwe on the part of the international community, although much depended on the country’s authorities.

He said Harare needed to sort out macroeconomic fundamentals, especially reducing inflation, which is at 1204%.

"We are looking for a set of policy measures that go in the right direction, and structural reforms are an important part of that," he said.

"Exchange market reforms are an important part of that. Frankly, in the end, (for) improvement in the business climate, the rule of law is an important part of that. You can do all of the above and if you do not convince the private sector, it is not going to work."

Nigerian Finance Minister Nenadi Usman said at the weekend that the sub-Saharan region had continued to register "strong growth and favourable economic outlook" due to the implementation of sound policies. However, Zimbabwe was the exception.

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