IMF says could resume financial aid to Zimbabwe in 2016

The International Monetary Fund (IMF) could resume financial aid to support Zimbabwe's economic reform efforts as early as 2016 if foreign creditors accept Harare's plans to clear arrears to international financial institutions.

IMF resident representative Christian Beddies told Xinhua Tuesday that it was possible for the multilateral lender to resume financial aid once Zimbabwe fulfilled certain required processes.

"Basically, the Zimbabwe authorities are trying to garner support for their strategy to clear arrears to the IMF and other international financial institutions.

"If the plan is accepted, Zimbabwe and the IMF could begin talks on a medium-term program that could be supported by the IMF financially but the final decision rests with the IMF Executive Board," Beddies said.

He emphasized that the financial aid for the medium-term program -- normally three years -- would support the Zimbabwe government in its economic reform efforts.

The reform program would also be home grown and designed by the Zimbabwe government but discussed together with the IMF before it could be approved and supported by the Bretton Woods institution, he said.

Zimbabwe will next month meet its creditors in Lima, Peru on the sidelines of the annual meeting of the World Bank and IMF to present and seek support for its strategy to clear 1.8 billion U.S. dollars arrears to the IMF, Wold Bank and the African Development Bank (AfDB).

Zimbabwe owes bilateral and multilateral creditors a combined 7 billion U.S. dollars.

Beddies said he had seen Zimbabwe's proposed plan to clear the arrears and that it was a "sensible" plan.

Zimbabwe has been on a two-year IMF Staff Monitored Program (SMP) since December 2013 whereby it is implementing home-grown economic reforms to strengthen its external position and lay the groundwork for clearance of its 7 billion dollars external debt.

A third and final review of the SMP will be conducted in Feb/March 2016, after which talks for a medium-term plan could begin, Beddies said.

He said the SMP is a short-term program that does not entail financial support to Zimbabwe while the planned medium-term strategy would entail financial support.

While being non-committal on the chances of Zimbabwe's debt plan being accepted by creditors in Peru next month, Beddies said Zimbabwe had made a lot of progress under the SMP which could provide good standing for the country.

"Zimbabwe has made a lot of progress under the SMP, so there is traction on the reform side of things," Beddies said.

The remarks by Beddies come at a time when the AfDB announced last week that it had availed funds to Zimbabwe to help it clear its 601 million arrears to the regional financial institution.

The funds are available to Zimbabwe until December 2016, the AfDB said. Enditem