Government, IMF find common ground

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GOVERNMENT and the International Monetary Fund (IMF) have reached an agreement on macro-economic policies and structural reforms to underpin the multilateral institution’s Staff-Monitored Programme.

A team from the IMF led by Mr Gene Leon was in the country last week to continue discussions on a Staff-Monitored Programme (SMP).

In a statement at the end of their visit, Mr Leon said:

“IMF staff and the Zimbabwean authorities have reached agreement on macroeconomic policies and structural reforms that can underpin a Staff-Monitored Programme.

“Zimbabwe is facing deep macro-economic imbalances, with large fiscal deficits and significant distortions in foreign exchange and other markets, which severely hamper the functioning of the economy.”

The SMP aims to implement a coherent set of policies that can facilitate a return to macro-economic stability.

“In addition, Zimbabwe is facing the challenge of responding to the adverse effects on agriculture and food security of the El Nino-related drought, as well as the devastation from Cyclone Idai.

“The SMP, which will be monitored on a quarterly basis, aims to implement a coherent set of policies that can facilitate a return to macro-economic stability. Successful implementation will assist in building a track record and facilitate Zimbabwe’s re-engagement with the international community,” Mr Leon said.

He said the policy agenda to be monitored under the SMP was anchored on Zimbabwe’s Transitional Stabilisation Programme and emphasises fiscal consolidation, and the elimination of central bank financing of the fiscal deficit.

In addition, the agreed policies — both macro-economic and structural — can be expected to remove critical distortions that have held back private sector growth and to improve governance. The SMP also includes important safeguards to protect the country’s most vulnerable people.

The IMF staff team met with Finance and Economic Development Minister Professor Mthuli Ncube, Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya, other senior Government and Central Bank officials as well as non-government representatives. —–

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