IMF ready to support Zimbabwe on new SMP
The International Monetary Fund (IMF) says it stands ready to support Zimbabwe with its request for a new Staff Monitored Programme (SMP) which was poised to begin in the fourth quarter of 2023.
An SMP is an informal agreement between country authorities and the IMF staff to monitor the implementation of the authorities’ economic programmes.
It does, however, not entail financial assistance.
The SMP is one of several policy initiatives that the Harare administration is supposed to carry out in accordance with a debt resolution and arrears clearance plan that it established with bilateral and multilateral creditors in February of this year.
Official requests for a SMP were made by the authorities in June 2023.
“With respect to Zimbabwe, the IMF stands ready to support Zimbabwe as soon as the authorities are ready,” Julie Kozak, director of the IMF’s communications department, told a press briefing about the latest engagements with Zimbabwe.
Kozak said an SMP would contribute to the country’s long-term restoration of macroeconomic stability.
“With strong policy commitment and implementation, the SMP would help stabilise the economy and revitalise growth,” Kozak said.
“It would also help build a track record of policy and reform implementation, which could pave the way for arrears clearance and debt restructuring in Zimbabwe.”
In Zimbabwe, the IMF has previously carried out two 15-month SMPs, the last of which ended in 2016 and 2019.
Even though Zimbabwe paid off its US$108 million in 15 years’ worth of outstanding debt arrears with the IMF in 2016, it is still not eligible to obtain fresh loans from the Bretton Woods organisation until it pays off arrears with other international financial organisations and bilateral creditors.
The southern African nation’s failure to satisfy terms on benchmarks for governance and economic change puts talks to restructure the debt with Western lenders in jeopardy.
Under the direction of Dr Akinwumi Adesina, President of the African Development Bank, the 2023 election served as a crucial litmus test for the system.
-ebusinessweekly
