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Mugabe in IMF U-turn

Chris Goko

PRESIDENT Robert Mugabe has reassured the International Monetary Fund (IMF) of his commitment to working with donors, particularly the Bretton Woods institute, IMF African director Abdoulaye Bio-T

chane has said.

In Harare this week, Bio-Tchane said his “rare engagement” with Zimbabwe’s leader was “fruitful” and that the quality of follow-up discussions with Zimbabwean authorities was encouraging.

Bio-Tchane, who skirted political issues, said he held meetings with key stakeholders such as Herbert Murerwa’s Finance ministry, Special Affairs minister John Nkomo, Gideon Gono’s central bank and ambassadors of several donor countries.

“I had the privilege of meeting President Mugabe. My meeting was intended to provide an opportunity for me to explain personally to the president the state of Zimbabwe’s relations with the IMF… and how we could establish a positive framework for moving forward,” he said.

“My discussions with the Zimbabwean authorities covered a range of economic and structural issues facing the country today. I explained that the fund wanted to… help Zimbabwe achieve its full potential and to integrate the country more closely with the international community,” he said.

Mugabe, the IMF boss said, noted that with agrarian reforms now largely over, he would have wanted more investment in the country’s rich mining sector — a fact that dovetails with Harare monetary authorities’ pronouncement on mining as a priority sector.

Bio-Tchane, however, stressed that Zimbabwe needed to “seize this window of opportunity to demonstrate strengthened cooperation with the fund” before its executive board considers the country’s compulsory expulsion.

Zimbabwe, virtually ostracised by the international community over repression and farm seizures, owes the IMF US$400 million out of a net global debt of US$1,2 billion. It has escaped complete severance of ties owing to the IMF’s magnanimity.

Harare has managed to pay up to US$18 million in installments of US$1,5 million in the first half of this year steadily rising to US$4,5 million in the second half.

It has also embarked on quarterly payments of US$1,5 million to the main World Bank and a similar amount to the African Development Bank, one of the country’s key infrastructural funders.

Corroborating Gono’s assertions that the government has managed to keep up payments without undue pressure, Bio-Tchane said the fund — along with other official creditors — was satisfied with Harare’s repayment rates considering its foreign cash capacity. Zimbabwe is in the throes of a six-year forex crunch.

Bio-Tchane, whose talks also bordered on macrostabilisation, substantive socio-economic reforms and corporate governance, said: “Such an increase (in payments) should be possible without undue import compression and hardship to the Zimbabwean people if a… package supported by external financing is adopted.”

Gono, now central to government recovery plans, said that in economic development, as in other matters, greater prospects are opened when there is dialogue.

“When creditors and debtors sit down and share development ideologies, objectives and ideas of helping each other, win-win outcomes always emerge, but no one should expect miracles overnight,” he told businessdigest in Harare yesterday.

Acknowledging the country’s huge arrears, Gono said the nation was aware that “settlement of obligations, investment protection” and many other aspects were central to the country’s turnaround agenda.

While the parties — the IMF and Zimbabwean officials — discussed ways of stabilising the economy, which include Gono’s envisioned Zimbabwe Allied Banking Group project, they (Harare officials) hoped to formulate ways of fully settling external arrears by 2007, he said.

The RBZ governor said he was not at liberty to divulge details of the talks between the visiting IMF executive and Mugabe, emphasising Bio-Tchane’s pronouncements were sufficient enough.

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