Zimbabwe’s Minister of Finance, Herbert Murerwa, on Monday said week-long talks with the International Monetary Fund (IMF), which is mulling expelling Harare for debt arrears, are by no means over.
”I am meeting them today [Monday] and the talks are ongoing. We are likely to continue talking this week,” he said.
Officials from the lending arm of the World Bank began talks with Zimbabwean officials last Monday over debt arrears totalling $300-million.
The mission was due to wind up on Monday, but Murerwa hinted at an extension. However, he did not specify a deadline, saying: ”How can a host ask his guests when they will leave?”
Murerwa refused comment on a South African media report suggesting that Zimbabwe would be given until September 9 to pay or face the boot, saying: ”How can they say that when we are still talking?”
South Africa earlier this month agreed to step in with a loan to ensure that its neighbour retains its IMF membership.
Talks held in Pretoria three weeks ago reportedly yielded a tentative agreement on a loan of between $200-million and $500-million, including about $100-million to be paid to the IMF.
A source in the IMF mission in Harare said the talks are not only about repaying the money but also focus on IMF demands that Harare limit and restructure public spending.
”It’s not only payment but policies as well,” the source said.
Zimbabwe’s economy has shrunk by 30% in the past four years following the seizures in 2000 of about 4 500 white-owned commercial farms, which sent agricultural production plummeting.
President Robert Mugabe’s government has blamed drought and sanctions by the European Union and the United States for the country’s economic decline, characterised by triple-digit inflation and high unemployment.
Murerwa recently presented a supplementary budget to pay wages, import food and build new housing, after admitting that targets for economic growth and inflation would be missed.
Inflation, already hovering at 164,3% in June, shot up to 254,8% in July, dealing a blow to the government’s goal of bringing inflation down to 80% by year-end.
The government is also spending on housing reconstruction in the wake of a controversial urban clean-up campaign in which shacks, market stalls, shops and homes were demolished. — Sapa-AFP