Implement reforms First: the Paris Club tells Zimbabwe Government in Response to Mtuli Ncube’s Financial Rescue package Appeal

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Dear Minister Ncube

Thank you for your letter dated April 2, 2020 regarding Zimbabwe’s current situation

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Paris Club members take note of Zimbabwe’s prolonged humanitarian crisis and the o me economie und financial situation of the country. They acknowledge these difficulties are exacerbated by the impact of the COVID-19 pandemic. They welcome the partial progress made by Zimbabwean authorities in implementing economic reforms in some areas in 2019. in particular on fiscal consolidation

Paris Club members insist, however, on the fact that the Government of Zimbabwe’s desire to normalize its relations with the international community can only advance following the implementation of substantive and sustainable political and economic reforms, in particular regarding the respect for human rights, especially freedom of assembly and expression. Paris Club members and ready to support positive developments, if they are substantive and sustainable. To this end, a successful implementation of an International Monetary Fund (IMF) Staff-Monitored Program (SMP) when the country has demonstrated its readiness to begin with a program, would be an important first step, as would be progress on political reform. Moar performance under the SMP of May 2019 is a missed opportunity in this regard. We encourage you to press forward with a credible reform program to stabilize the economy and strengthen economic governance.

The Paris Club recognizes that Zimbabwe could benefit from a debt treatment from Paris Club creditors, should this be requested by Zimbabwean authorities and should it be favorably assessed by Paris Club members. Such a debt treatment would he based on an assessment of the financial needs of Zimbabwe to bring its external debt to sustainable levels Before any Paris Club treatment prior condition is multilateral arrears clearance. The normalization of relations, including any potential debt treatment, can only begin once Zimbabwe has cleared all arrears to International Financial Institutions, in particular to the World Bank and the African Development Bank. In addition, the Paris Club will be closely monitoring IFI support to Zimbabwe for COVID 19 assistance programs, which must be implemented transparently and in full compliance with its goal and rules Zimbabwe will also have to establish a satisfactory track record in an IMF program of upper credit tranche (UCT) quality. Once the country has met the criteria, it can request to enter formal discussions with the Paris Club on debt restructuring

Paris Club creditors encourage Zimbabwe to develop sustained dialogue on economy development and debts will the Paris Club Secretariat. The Secretariat Eschwand af remains at your disposal should you need any further information.

Yours faithfully,

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