Thursday, April 19, 2012
Thursday, 19 April 2012 00:00
AN International Monetary Fund delegation is expected in Zimbabwe next month to assess the country’s economic performance. The visit is in line with Article IV of the IMF’s mandate, which requires the institution to conduct consultations aimed at assessing economic progress and solutions to challenges affecting productive sectors.
The IMF team is expected to meet Government ministries, Reserve Bank of Zimbabwe authorities and captains of industry and commerce. Zimbabwe’s economy has largely been on a recovery path since dollarisation, a fact that previous Article IV consultation visits have confirmed.
Economic Planning and Investment Promotion permanent secretary Dr Desire Sibanda has said that Zimbabwe’s economic growth rates have averaged 8 percent over the past couple of years, making it one of the leading countries in yearly Gross Domestic Product (GDP) rate rankings in Southern Africa.
The IMF has, however, been rather pessimistic in its view on the country’s growth prospects. For instance, the IMF has estimated that Zimbabwe’s economy has grown by an average of between 3 and 4 percent in the years since introduction of the multicurrency system.
Some observers have also lamented the limited role of the IMF in respect of Zimbabwe.
The multilateral lender is more likely to maintain its focus on giving the country advice on its fiscal and monetary policies and less likely to extend any financial assistance due to Zimbabwe’s debt overhang.
Common Market for Eastern and Southern Africa Business Council (CBC) secretary-general Mr Trust Chikohora, however, says the role of the IMF — beyond financing — can be of benefit to the country.
“IMF’s visit to assess economic performance is important for the country as we continue on our journey of economic revival and growth. It allows us to measure our progress vis-a-vis against generally accepted international economic bench marks. It also gives us an opportunity to interface with the IMF and tell them our economic development story from our own point of view while at the same time being able to find out more on their own views,” he said.
Zimbabwe is, however, in serious need of funding as the National Budget is inadequate to fund critical projects. The financing situation has further been heightened by the underperformance of the diamonds sector, which had been anticipated to contribute at least US$600 million to the US$4 billion 2012 National Budget.
According to statistics from Treasury, Zimbabwe’s budget deficit has swelled to US$93 million as at the end of last month due to depressed diamond revenues. Mr Chikohora contends that greater engagement with the IMF can open the doors for funding opportunities.
“Technical assistance can also be given by the IMF in the interim. This regular interface will eventually lead to progress and unlock some funding going forward.
“The idea is to get funding from the international institutions as soon as possible,” he said.
Despite the challenges, the local economy is this year expected to grow by 9,4 percent on the back of anticipated growth in the mining, agricultural and industrial sectors.