The Sunday Mail
THE international community is gradually warming up to Zimbabwe’s efforts to attract meaningful capital inflows, developments at the annual meetings of the International Monetary Fund and the World Bank between October 10 and October 12 show.
Dr John Mangudya, who made his maiden trip to Washington after he had been appointed Reserve Bank of Zimbabwe Governor in March this year, said there was a lot of international goodwill. “Both the international community and bilateral co-operating partners’ meetings were very fruitful; they are willing to assist us, so the onus is on us to deliver as a nation. We now need to put our house in order and we are looking forward to do that,” said Dr Mangudya.
The IMF and WB indicated the need to stabilise local financial systems and improve the country’s productive capacity to attract investment.
Zimbabwe recently met set benchmarks of the IMF’s Staff Monitored Programme (SMP), an informal agreement between country authorities and Fund staff to monitor implementation of economic programmes. Monetary authorities have since created a special purpose vehicle, the Zimbabwe Asset Management Company (ZAMCO), to absorb toxic debts held by banks as a deliberate effort to stabilise the sector and unlock dead capital.
Amendments to the Banking Act are expected to open the window for additional interventions. There is also a push for policymakers to clarify the Indigenisation and Empowerment Act.
Said Dr Mangudya: “To add on to that, the IMF was satisfied with our first SMP programme and said they were looking forward to the second staff programme, where we focus on the practical programme pragmatisation and the attainment of poverty eradication.”
Government and the IMF Mission signed a letter of intent for a successor SMP programme running from October to December 2015.
Government has also committed to eliminating fiscal deficits in order to send a strong signal that the country intends to live within its means.
The programme focuses on fiscal consolidation and the strengthening of public financial management systems, completing the structural reforms in the areas of tax administration and increasing transparency in collection of revenues, particularly in diamond mining.
The programme also seeks to enhance financial sector stability and reduce vulnerabilities and complete the Reserve Bank of Zimbabwe reforms, especially the restructuring of its balance sheet and the strengthening of the banking sector regulatory and supervisory framework.
Its successful implementation has been set as a precondition for negotiating clearance of Zimbabwe’s arrears and debt relief, which will also assist in improving the country’s credit rating.
