World Bank, IMF start talks with Zim govt over economic recovery

World Bank, IMF start talks with Zim govt over economic recovery
Written by Kingsley Kaswende in Harare, Zimbabwe
Tuesday, May 19, 2009 5:25:37 PM

THE World Bank and International Monetary Fund (IMF) have commenced face-to-face consultations with the Zimbabwean government aimed at pushing the country's economy back to positive growth.Both World Bank and IMF teams are currently in the country carrying out assessments and consultations with various government agencies after which concrete steps will be taken to help Zimbabwe get back on track.

The World Bank on Monday afternoon announced a US $22 million grant to Zimbabwe to help the country's revival efforts, while the IMF embarked on practicalities that follow the IMF executive board decision on May 4 to resume technical assistance to Zimbabwe, which is key to revival.

World Bank executive director for Africa Group 1, Toga McIntosh, told journalists after a meeting with finance minister Tendai Biti that the Bank would by today come up with an effective strategy for Zimbabwe._"There is a substantial amount of money ... but our first task is to see how Zimbabwe can get on the path of debt reduction. There are a number of small grants and we have US $22 million, which should be available within the next two weeks or month," he said.McIntosh said internal efforts by the Zimbabwean governments aimed at turning round the country had spurred the Bank to move in.

"We are here on a mission to join hands with the people and government of Zimbabwe to move from where we are to where we want to be. The minister has put across a very good short term programme which is very important in achieving the change," he said. "This is the first step as we have to be strong and work hard to get the country's financial systems to start working again. As the World Bank, your office [Africa Group 1)], which is also my office, is going to do all it can so that we get Zimbabwe back on track."And the IMF technical team, which will be in the country for two weeks, will be assessing the country's banking system, central bank governance systems, and determine credibility of payment systems in view of the country's transition to a multi-currency system after abandoning the worthless Zimbabwe dollar.

The team is led by Erik Oppers, a senior economist in the IMF Africa division's monetary and capital markets division. Other members of the team are Kenneth Sullivan and Warren Coats, who are experts on central bank governance and currency regimes, as well as Mike Andrews, an expert on bank supervision, and Kristian Kjeldsen, an expert on payment systems.Biti said the visits by the two Bretton Woods institutions were important in normalising the country's relationship with them, as the relationship had soured over the past decade."We have to work on arrears and debt clearance as we have not been able to avail ourselves to the World Bank.

We need their assistance in public finance systems and tax structures, among other issues, but we would be talking to them on how they can assist Zimbabwe to rehabilitate its infrastructure," he said.Biti further called on the countries that had imposed sanctions on Zimbabwe to lift them.On May 4, the IMF announced it was resuming technical assistance in targeted areas of Zimbabwe, such as tax policy and administration, payments systems, banking supervision as well as central banking governance and accounting.-