HARARE, May 29 (The Source) – An International Monetary Fund team will visit Zimbabwe next week to review the country’s Staff Monitored Project as Harare grapples with a deteriorating economy, finance minister Patrick Chinamasa has said.
An SMP is an informal agreement between a government and IMF staff to monitor the implementation of a particular country’s economic programme. It does not entail resumption of funding from the multilateral finance institution.
“The team should be in the country this coming week to validate the external debt,” Chinamasa said.
Reserve Bank deputy governor, Khupukile Mlambo also told The Source that central bank officials were scheduled to meet with the IMF team in Harare next week.
In January the Bretton Woods institution approved a six-month extension of Zimbabwe’s Staff Monitored Programme (SMP) to allow the government to strengthen its policies and deliver on outstanding commitments. This came after treasury failed to meet key benchmarks such as reducing the government’s wage bill.
Treasury spends 70 percent of its budget on salaries and this, according to finance minister Patrick Chinamasa, will persist in the short-to-medium term.
Zimbabwe began the SMP in June 2013 but requested an extension after failing to meet the December timelines. If successful, the programme could help it clear $10 billion in external debts and give it access to new credit from international lenders.
Under the SMP, Zimbabwe is expected to implement a raft of economic reforms and has committed itself to the programme.
The SMP focuses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities, and restructuring the central bank.