OWN CORRESPONDENT, Harare | Friday 12.15pm
THE Zimbabwe government has abandoned the sale of Hwange power station to Malaysia’s YTL and is currently renegotiating the deal to woo the support of international financiers.
The government has already communicated its decision to the International Monetary Fund and its sister institution, the World Bank. It forms part of a three-year action programme submitted by the government to the Bretton Woods lenders.
It has also emerged this week that the IMF Africa Department director, Godfrey Gondwe, has made a written response to pleas by the private sector for the organisation to release its long-awaited $53-million stand-by facility when its board meets next Wednesday.
Gondwe said the IMF believes the government’s economic programme will bring inflation under control and stabilise the exchange rate if effectively implemented. “We would very much like to provide financial assistance in support of this programme, but understandings still need to be reached in certain important policy areas,” Gondwe said in his letter to local industrialists dated April 16, 1999. “We are confident that this can be done soon.”
However, the the Wednesday meeting of IMF executives is unlikely to consider the release of the remaining tranches totalling $176-million to shore up the country’s ailing currency and restore confidence in the economy.
In the programme submitted to the IMF, titled Action Plan: The Way Forward, the government undertakes to share details of the plan with stakeholders. The plan represents a schedule to implement the country’s second phase of economic reforms whose objectives had been scuppered, the government claims, by the recent economic downturn.
The plan outlines the government’s objectives to mobilise concessional external aid worth about $1-billion over three years, tighten fiscal policy to eliminate parastatal losses, and raise at least $5-billion over three year through privatisation and boosting exports. This would be facilitated, the plan suggests, by, among other things, reintroducing corporate foreign accounts suspended following the collapse of the local unit.
Other commitments by the government include implementation of the land reform as agreed at a donor conference in September last year. — The Zimbabwe Independent