Zimbabwe clears debt to stay in IMF

Zimbabwe has averted expulsion from the International Monetary Fund by paying off its arrears, the fund has confirmed.

Mugabe's policies have crippled Zimbabwe's farm economy

“Zimbabwe today made a further payment of $9 million to the International Monetary Fund, thereby fully settling its remaining overdue financial obligations to the General Resources Account,” the IMF said in a statement on Wednesday.


The settlement removed the basis for the forced removal of Zimbabwe from the fund. Harare expects that it will also unlock new foreign aid for its ailing economy.


“Accordingly, the managing director withdrew his complaint today, thereby cancelling the procedure for compulsory withdrawal,” the IMF statement said on Wednesday.


The IMF had threatened to expel Zimbabwe over debt arrears, but Robert Mugabe’s government said it had been making regular payments to the fund and would clear its arrears before a deadline in March to pay up or risk expulsion.


This development gives Zimbabwe the right to reclaim its voting rights in the fund … and should open up new aid”

Zimbabwe Television in a statement 

Zimbabwe Television said on Wednesday that Harare, which early this month said it had paid up $184 million to the IMF over the last 12 months and reduced its arrears on the general account to $14.5 million, had cleared the debt.


“Zimbabwe has cleared all its obligations under the General Resources Account,” it said.


“This development gives Zimbabwe the right to reclaim its voting rights in the Fund … and should open up new aid,” the station said.


Controversial policies


The IMF and many other key Western donors, including the World Bank, suspended financial aid to Mugabe’s government more than six years ago over his political and economic policies, including his seizures of white-owned commercial farms for redistribution to new black farmers.


Critics say the policies have plunged the southern African nation into its worst crisis since independence in 1980, and Zimbabwe‘s failure to service its foreign debts prompted the IMF to suspend Harare‘s voting rights in the fund in 2003 and sparked the expulsion threats.


An IMF mission that visited Zimbabwe early this month had said Mugabe’s government must implement comprehensive reforms to help repair an economy many once saw as one of Africa’s most promising.


Zimbabwe's economy is in its sixth year of recession 
Zimbabwe’s economy is in its sixth year of recession 

Zimbabwe’s economy is in its
sixth year of recession 

The IMF team, which will now present a report to the fund’s executive board – scheduled to decide Zimbabwe‘s future in March – demanded that Mugabe’s government honour a pledge to stop farm invasions that have crippled commercial agriculture.


The government had in the past sanctioned the land invasions, carried out to back its seizure of white-owned commercial farms for landless blacks under a sometimes violent policy launched in 2000.


The decline has worsened the plight of an economy now in its sixth year of a recession shown in chronic shortages of food, foreign currency and fuel, soaring unemployment and world’s highest inflation rates – which climbed to 613% last month.


Mugabe, 82 next week and in power since the country’s independence from Britain, denies that he has mismanaged the country, and claims that the economy has fallen victim to sabotage by domestic and foreign opponents of his land seizures.   

Source: Reuters