OWN CORRESPONDENT, Harare | Tuesday 3.45pm.
THE International Monetary Fund has suspended $55-million in aid to Zimbabwe after the government’s seizure of 841 white-owned farms last week, Western diplomats said on Tuesday.
The IMF believes that the seizures contradict decisions reached during round-table talks held in Zimbabwe in September where it was agreed that an initial two-year land reform phase would see 118 farms appropriated for landless peasants.
The word in diplomatic circles is that the government was due to receive $55-million, representing the second and third tranches of an IMF stand-by loan agreed earlier this year.
Having already complained about Zimbabwe’s privatisation programme, the IMF has sought assurances from Zimbabwe that military expenditure, which has increased hugely since Zimbabwe sent troops into the Democratic Republic of Congo, will not compromise efforts to control the deficit and that civil service salaries will not exceed 12,5% of the GDP. The land seizures is reportedly the last straw for the IMF who has been pressurising the government to conduct the land reform programme in a transparent and fair manner.
The near future looks even more troubling for Zimbabwe’s ailing economy considering that IMF decisions of this nature tend to be matched by other lenders, such as the World Bank, which currently has $100-million earmarked for Zimbabwe.
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