Zimbabwe EXCLUDED from IMF Debt Relief, Several African Countries to Benefit

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The International Monetary Fund (IMF) Executive Board approved immediate debt relief for 25 countries, according to a statement released on 13 April.

The Managing Director of the IMF Ms. Kristalina Georgieva said in the statement, “Today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of COVID-19 pandemic.

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“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources vital emergency medical and other relief efforts.”

She went on to say that the CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million provided by Japan as immediately available resources. Others, including China and the Netherlands, are also stepping forward with important contributions. She urged other donors to help the IMF to replenish the Trust’s resources and boost further it’s ability to provide additional debt relief for a full two years to the poorest member countries.

The countries that will receive the IMF debt service relief are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, Congo D. R., The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, Sao Tome and Principe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yeman.

Analysts suggests that reason that Zimbabwe is not on the list because the country cleared the IMF DEBT in 2019.

This comes despite the IMF report of 26 February which observed that, “Zimbabwe is experiencing an economic and humanitarian crisis. Macroeconomic stability remains a challenge: the economy contracted sharply in 2019, amplified by climate shocks that have crippled agriculture and electricity generation; the newly introduced ZWL$ has lost most of its value; inflation is very high; and international reserves are very low. The climate shocks have magnified the social impacts of the fiscal retrenchment, leaving more than half of the population food insecure. With another poor harvest expected, growth in 2020 is projected at near zero, with food shortages continuing.”

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In 2019 report the IMF however noted that Zimbabwe remains in debt distress, with external arrears of US$5.7bn (about R83bn) at the end of 2017. This was preventing access to “new financing from the IFIs (international financing institutions) and limiting access to external financing to non-traditional official and commercial creditors”.

Despite the clearance of the arrears, Zimbabwe still owes US$687 million to the African Development Bank, US$1.4 billion to the World Bank, US$322 million to the European Investment Bank.

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