ZIMBABWE will undergo a new International Monetary Fund (IMF) Staff-Monitored Programme (SMP) in the coming year for the umpteenth time against the backdrop of previous concerns raised by the multilateral lender over policy slippages.
BERNARD MPOFU
As the debt-ridden country undertakes to embrace economic and political reforms to normalise relations with its creditors, undergoing an SMP is one of the critical steps for Harare in its quest to normalise relations with international financiers.
Finance minister Mthuli Ncube, who was in Marrakech, Morocco, attending World Bank/IMF spring meetings, told local journalists during a virtual Press briefing that the new SMP will focus on fiscal consolidation, exchange rate stability, among other key macro-economic indicators.
“We are working towards putting in a new Staff-Monitored Programme with the IMF, so basically the current debt dialogue activities are all in one way or the other building towards that, especially the economic track,” Ncube said.
“Our intention is that by the time we go for the spring meetings in April 2024 we should have signed off on a Staff-Monitored Programme . . . It will focus on maintaining discipline on the fiscal front and continue fine-tuning our exchange rate system and maintaining a tight monetary policy.”
Political interference and policy reversals have often been cited as some of the reasons unnerving potential investors from injecting capital into the debt-ridden southern African nation. The spring meetings were running under the theme Global Action, Global Impact.
An IMF Staff-Monitored Programme is an informal agreement under which fund staff keep tabs on a member country’s economic programme.
The IMF has in the past said while Zimbabwe has been pursuing a reform agenda in its quest to stabilise the economy and normalise relations with creditors, mixed signals on policy remained a source of worry.
Last year, a visiting IMF mission which concluded Article IV consultations on Zimbabwe said there was a need for a new SMP after previous ones had been affected by policy inconsistency.
“International re-engagement has lagged as stakeholders seek political and economic reforms. The 2019 Staff-Monitored Programme experienced significant policy slippages and elapsed without a review,” the IMF said.
“Directors encouraged the authorities to advance reforms, noting that a new Staff-Monitored Programme could help establish a track record of sound policies and provide further impetus to their re-engagement efforts.”
The IMF sees Zimbabwe’s economy expanding by 4%, an upward revision from the initial forecast of 3.2%.
