Back to Index

This article participates on the following special index pages:

IMF gives Zim US$500m
Victoria Ruzvidzo, The Herald (Zimbabwe)
September 04, 2009

http://www.herald.co.zw/inside.aspx?sectid=9574&cat=1

The International Monetary Fund has disbursed US$400 million to Zimbabwe, with an additional US$110 million scheduled for release next week to help the country stave off the effects of the global recession and buttress the economic revival programme.

The funds have already been deposited into the Reserve Bank of Zimbabwe's account.

The IMF last extended assistance to Zimbabwe 10 years ago and has, over the years, been constrained by the blocking vote of US representatives who are barred by the US sanctions law, the so-called Zimbabwe Democracy and Economic Recovery Act, from voting in support of financial assistance to Zimbabwe.

The latest development comes in the wake of months of behind-the-scenes interactions between the RBZ and the IMF after the former successfully lobbied for the injection of funds to stimulate the economy.

RBZ Governor Dr Gideon Gono confirmed the development last night.

"Yes, I can confirm that the Reserve Bank of Zimbabwe did indeed receive the funds and as responsible advisors to Government, we are consulting widely before any utilisation.

"We have been in constant delicate discussions with IMF technical teams over the past few months and I am pleased to now say that we have gotten somewhere," he said.

Already SDR 262 million, which is equivalent to US$400 million, has been received as the first instalment, with the balance expected next week.

The SDR is the IMF's currency issued to member countries.

The financial injection comes at a time of liquidity challenges in the fiscus even as the economy is projected to grow by 3,7 percent this year.

Over the past decade, Zimbabwe has received limited assistance from external partners, and an appeal earlier this year for US$8,3 billion for the Short-Term Emergency Recovery Programme launched in March went largely unheeded.

The IMF funds come under its window to assist member countries weather the current global financial crisis following recommendations by the G-20 countries at their 2009 spring meetings in London where they agreed on the need for the implementation of a supportive framework.

Dr Gono would not divulge more details on the latest development.

"As Governor I have already communicated to my principals in Government this good news and have specifically invited my Honourable Minister of Finance (Tendai Biti) for us to discuss the modalities of operationalising usage of these funds.

"I am very confident that all this will yield very fruitful results over the next few days.

"All we kindly ask of our stakeholders is that we rise above personality issues and work as a nation.

"As a central bank, we express our high indebtedness to the IMF technical teams for their valu-

able professionalism, and the entire IMF board and management for their continued trust in the Reserve Bank's capacity to handle and manage developmental resources," said Dr Gono.

The RBZ chief also commended the G-20 for their hand of assistance in seeing the value of transforming the IMF into an institution of "monumental" help to the developing world.

Zimbabwe remains a member of the Bretton Woods institution, following the settlement of an outstanding US$210 million by the RBZ in 2005/2006, a payment that created widespread controversy and debate as some stakeholders argued that Dr Gono and his team should not have released the money.

However, the implication of Zimbabwe's continued membership in the IMF is that it is now benefiting from the current interventions under which member countries can make explicit requests for conversion of their Special Drawing Rights (SDRs) allocations, into foreign exchange reserves.

Zimbabwe last received financial assistance from the IMF in 1999 when it approved a standby facility of US$193 million of which only US$24 million was disbursed.

The balance never came Zimbabwe's way with the institution saying it was not happy with some of Government's policies.

Numerous attempts by the central bank for an extension of financial assistance had been futile until the latest development.

The IMF move is expected to spur other multilateral institutions to open Zimbabwe's lines of credit.

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP