Washington | Wednesday
THE International Monetary Fund said on Tuesday it had barred Zimbabwe from IMF loans or use of its general resources as the country’s overdue payments mount.
The IMF executive board ”declared Zimbabwe ineligible to use the general resources of the IMF and removed Zimbabwe from the list of countries eligible to borrow resources under the poverty reduction and growth facility,” it said in a statement.
”The declaration of ineligibility to use the general resources of the IMF is one of the remedial measures taken to encourage members to settle overdue financial obligations to the IMF.”
Since mid-February, Zimbabwe has fallen $53-million behind in its payments, the IMF said.
IMF directors urged Zimbabwe to make full and prompt settlement of its overdue payments, and said they would review the country’s overdue financial obligations within three months.
”The executive board acknowledged the authorities’ intention to initiate quarterly payments to the IMF as a first step of cooperation with the IMF, but regretted that those payments would fall far short of the amount required to stabilize the level of arrears to the IMF,” the IMF statement said.
The IMF suspended loans to Zimbabwe in October 1999 after government efforts to liberalise the economy went off-track, prompting most other lenders to pull out and leaving the country with little credit and practically no foreign currency.
In May, the fund said Zimbabwe had stopped payment on its loans.
The government was $690-million behind on its foreign debt payments by the end of July, according to the finance ministry.
Zimbabwe’s total foreign debt is estimated at four billion dollars.
Starved of IMF support, the Zimbabwean economy has in the past two years been in free-fall, with foreign exchange critically short, inflation at about 70% and unemployment hovering at more than 50%.
The foreign currency shortage has left the government frequently unable to maintain an adequate supply of electricity and fuel, with other essential imports such as medicines also in short supply.
Zimbabwean President Robert Mugabe has criticized the fund as a tool for western countries to deprive developing nations of much-needed support on political grounds, such as a country’s human rights record. – Sapa-AFP
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