HARARE, Sept. 23 (Xinhua) -- The International Monetary Fund (IMF) on Tuesday ruled out extending any fresh loans to Zimbabwe until the country settles its arrears with all multilateral financial institutions.
The Zimbabwe government owes 2.582 billion U.S. dollars to multilateral creditors of which 1.6 billion dollars is in arrears. It owes the World Bank 1 billion dollars, the African Development Bank (AfDB) 612 million dollars, European Investment Bank 350 million dollars and 142 million dollars to the IMF.
Zimbabwe also owes the Paris Club 3.09 billion dollars and other creditors, which brings its total external debt to 6.9 billion U.S. dollars.
In addition, Zimbabwe's private sector owes 1.9 billion U.S. dollars to multilateral creditors but the debt is being serviced.
Speaking at a Zimbabwe-IMF breakfast meeting, the head of the IMF visiting team to Zimbabwe Domenico Fanizza said Zimbabwe cannot benefit from the IMF financial support because of its outstanding debt to the Bretton Woods institutions.
"Moreover, it's not only arrears with the Fund. The Fund, by its law and statutes, cannot extend loans to Zimbabwe until the country resolves arrears with other multilateral financial institutions such as the World Bank and the AfDB. That is the real problem, we need to resolve that problem," Fanizza said.
Zimbabwe has not been accessing IMF loans since 2000 due to the debt.
He said the IMF could also not extend loans to Zimbabwe's private sector despite the fact that it was servicing its debt because that was outside its mandate.
The IMF only lends to governments mostly through central banks, he said.
Leading an IMF mission to Zimbabwe for 10 days, Fanizza criticized Zimbabwe's high public sector wage bill and challenged Zimbabwean authorities to reduce it in order to create funding for social and infrastructural development.
"Your wage bill, at 20 percent of the GDP, is plenty inconsumable and you need to find a way to rein it down. I don't think Zimbabwe can afford such a high wage bill," he said.
Out of every 100 dollars that the Zimbabwe government collects in revenue, 76 dollars of that goes to wages.
Fanizza also challenged Zimbabwe to continue fostering good relations with external development partners and to work on changing the negative perception of the country to create a solid foundation for investment attraction.
"The rest of Africa is experiencing fast economic growth and you should join that. You need to become part of the emerging Africa. Don't think that you are special," he said.
Finance Minister Patrick Chinamasa acknowledged that the government wage bill was unsustainable but lamented the lack of an enabling environment for government to correct the situation.
The finance minister also appealed to the IMF to exert its influence on the World Bank so that it could let its private sector arm, the International Financial Corporation, to lend to Zimbabwe's private sector.
The IMF team is in Zimbabwe to conduct a third and final review of the one-year Staff Monitored Program (SMP) and to discuss a possible successor SMP.
|
