Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Clear arrears: IMF tells Zim

Clear arrears: IMF tells Zim

http://www.thezimbabwean.co.uk/

The International Monetary Fund will not give Zimbabwe any more money until 
it repays outstanding arrears amounting to more than $200million, business 
sources have confirmed. The country owes $550 million in all.
27.06.1211:26am

by Ngoni Chanakira Harare

A high level IMF delegation was in Zimbabwe for the annual Article IV 
Consultations. They held discussions with several individuals including 
ministers.

“Yes we met with the IMF in Harare,” said a senior official from the 
Business Commission of Zimbabwe, which is led by David Govere and represents 
all business organisations.

“They said Zimbabwe must clear all outstanding IMF arrears and get its 
economy back on track.”

The news comes hardly a week after President Robert Mugabe castigated 
Minister of Finance, Tendai Biti, accusing him of sidelining the “City of 
Kings” – Bulawayo.

“If Bulawayo dies then all of Zimbabwe dies,” Mugabe said in Bulawayo before 
dashing off to Rio De Janeiro in Brazil to attend the three-day Summit on 
the Environment.

“I asked Biti what he had done with the $500,000 we had been given by the 
IMF and he said he only had about $100,000 left. We should have used that 
money to bring the businesses in Bulawayo up to standard because most of 
them were closed.”

An economist said $500,000 would hardly be enough to re-equip one company. 
Mugabe also took a swipe at the IMF, accusing it of sidelining developing 
nations.

Numerous politicians and business executives have accused Mugabe’s 
government of ignoring Bulawayo over the years.

The IMF has said several issues needed to be sorted out including structural 
impediments, the acceleration of indigenisation in mining and other sectors, 
property rights and political uncertainty.

It said it was worried about higher than anticipated increases in imported 
food and fuel prices as well as the financial system where most commercial 
banks were under-capitalised.

“Zimbabwe does not have the capacity to pay off the IMF’s arrears from its 
own resources,” Biti said in Harare. “We will need to request cooperating 
partners for a concessional bridging loan or grant to settle the arrears.”

Clearance of the arrears would unlock new financing arrangements from the 
IMF, which would then be used to repay the bridging loan obtained from the 
cooperating partners.

Zimbabwe owes multilateral institutions a grand total of $2,504 billion, 
including $1,126 billion to the World Bank, $529 million to the African 
Development Bank and $221 million to the European Investment Bank. 

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