Bloomberg News

Zimbabwe Agrees to IMF Program to Become Eligible for New Loans

June 07, 2013

Zimbabwe will agree to the terms of an International Monetary Fund program to settle its $10.7 billion debt and become eligible for new external borrowing, Finance Minister Tendai Biti said.

The southern African nation, which has been in default to international creditors since 1999, has accepted an IMF-monitored plan that will allow it to borrow from the World Bank and African Development Bank, Biti told reporters today in the capital, Harare.

“When you continue to default, no one trusts you on the international market,” Biti said.

Zimbabwe’s economy entered recession and inflation began to surge after President Robert Mugabe in 2000 backed an often violent program of seizing white-owned commercial farms and redistributing them to black subsistence farmers.

The economy is recovering after Biti in 2009 abandoned the Zimbabwean dollar and adopted foreign currencies including the euro and U.S. dollar as legal tender to tame hyper inflation the IMF estimates accelerated to 500 billion percent.

The government forecasts the economy may grow about 5 percent this year from 4.4 percent in 2012.

Zimbabwe’s top court has ordered presidential elections to be held by July 31. They will end a power-sharing government between Biti’s Movement for Democratic Change and the Zimbabwe African National Union-Patriotic Front, led by Mugabe, following elections flawed by violence and intimidation in 2008.

A formal letter accepting the IMF program will be sent to its managing director, Christine Lagarde, next week, Biti said.

To contact the reporter on this story: Brian Latham in Harare at blatham@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net


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