IMF lays down the law for Zimbabwe post-Mugabe
By
Chris Marsden
27 November 2017
Even before Emmerson Mnangagwa was inaugurated as president Friday, the International Monetary Fund (IMF) issued a list of demands post-Mugabe Zimbabwe must meet before being reconsidered for financial aid packages.
The demands make a nonsense of Mnangagwa’s platitudes and bromides about renewed democracy, his promise “to serve our country as the president of all citizens” and to provide “jobs, jobs, jobs,” delivered in a packed stadium in the capital Harare.
On Thursday, Reuters was told by IMF mission chief for Zimbabwe Gene Leon, “While growth in 2017 will be boosted by the bumper harvest due to the exceptional rainfall, the challenge is to sustain growth going forward in a context where macroeconomic stability is threatened by high government spending, the foreign exchange regime is untenable, and the pace of reform inadequate.”
The first task was to address “Excessive government spending” and “the central bank creating money” that was “potentially jeopardising the financial sector.”
This meant deficit reduction (through cuts), accelerated “structural reforms” to “restore fiscal and debt sustainability” (more cuts) and to “rebalance the economy towards one where growth is driven by the private sector” (more cuts to the public sector as well as privatisations).
Before re-engaging “with the international community to access much needed financial support,” Zimbabwe, which has already paid its arrears to the IMF, must also pay off arrears to the World Bank, the African Development Bank (AfDB) and the European Investment Bank accrued since international aid was cut off in 1999.
This amounts to US$1.4 billion to the World Bank and US$600 million to…