The International Monetary Fund will oversee a program of economic policies undertaken by Zimbabwe in a first step toward making the country eligible for external borrowing.
The so-called staff-monitored program runs from April to December and was approved by IMF Managing Director Christine Lagarde, the fund said in an e-mailed statement today. While it doesn’t come with any money, it is the first agreement between the lender and Zimbabwe in more than a decade, the IMF said.
“Zimbabwe remains unable to access IMF resources because of its continued arrears to the fund,” the Washington-based lender said in the statement. “А strong track record of maintaining macroeconomic stability and implementing reforms, together with a comprehensive arrears clearance strategy supported by development partners, will be essential for resolving Zimbabwe’s large debt overhang.”
The southern African nation has been in default to international creditors since 1999. It 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.
Finance Minister Tendai Biti told reporters last week that the country has accepted the IMF-monitored plan to settle its $10.7 billion debt and become eligible for new external borrowing.
Zimbabwe has about $125 million of arrears to the fund, according to the institution’s website.
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 hyperinflation the IMF estimates accelerated to 500 billion percent.
“The strong rebound seen after the end of hyperinflation seems to have run its course,” the IMF said today. “Sustaining high growth will require determined efforts at economic reform,” it said, citing measures in the program including in public financial management and financial industry regulation.
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