The International Monetary Fund (IMF) will press Zimbabwe to privatise its ailing parastatals that have been ”bleeding the fiscus”, according to sources who met with the global lender in Harare recently.
”The IMF wants the government to sell its stake in the parastatals to finance its social services,” the sources told the Mail & Guardian. Since independence, the parastatals — which include Air Zimbabwe, National Railways of Zimbabwe and the Zimbabwe Iron and Steel Company — have been making huge losses. Air Zimbabwe alone is running at a R6-million loss every month.
The IMF presented its report to Zimbabwe’s finance and economic development ministers on Wednesday after a week-long routine assessment in the country.
Economists noted that the IMF was ”very concerned” about the state of the parastatals, incoherent policies, increased government expenditure and exchange rate management.
”They are no longer worried about where the money used to settle the country’s arrears with the IMF came from. They are more worried about the country’s [economic] recovery plans,” said John Robertson, an economics consultant. Farayi Dyirakumunda, a Harare-based economist, said: ”The IMF believes that the government is inconsistent in its polices …
”Money supply growth is still high, and the government is beginning to manage the exchange rate that should be left to market forces.”
The role of the central bank in Zimbabwe’s economic turnaround strategy has also caused unease the IMF. While Reserve Bank Governor Gideon Gono has been heaped with praise for his condemnation of farm invasions, his warnings of violent food riots if economic hardships persist and his stance on corruption, he is believed to be overstepping his brief. During his monetary policy statement last week, he indicated that he had distributed Z$13-trillion (about R430-million) to bail out parastatals. And herein lies the problem with Gono, an economist with a commercial bank told the M&G.
”The monies were pumped into bottomless pits because most of these parastatals did not provide any turnaround strategies. We can’t be printing money and dishing it out like that. It fuels inflation and Gono should have known that. Now he wants to turn the Reserve Bank into a commercial bank. It’s wrong. We will definitely become the first central bank in the world to go commercial,” he said.
”Some of the things he touches on are outside his domain,” said Tendayi Biti, opposition Movement for Democratic Change shadow secretary for economic affairs.
”His entanglement with quasi fiscal issues, providing money to local authorities and parastatals and managing them is not his domain. Those issues should be dealt with by central government.”’