Zimbabwe’s failure to get any financial support from the International Monetary Fund -IMF has been blamed on the unsustainability of its debt as well as its outstanding arrears.
The IMF in a statement said its staff had completed a month-long virtual mission to Zimbabwe from 16 October to 16 November and noted that there are significant efforts by authorities there to stem inflation, contain budget deficits, and reserve money growth.
Zimbabwe, which has more than $10 billion in debt, most of which is in arrears has suffered from bouts of hyperinflation in the last 15 years and has failed in getting funding from lenders like the IMF and the World Bank for more than two decades due to arrears.
In September, the government said it has made symbolic debt repayments to some creditors for the first time in 20 years, a country that is still reeling from decades of financial mismanagement under its late former president Robert Mugabe.
After several years of economic contraction, and despite the fallout from the coronavirus pandemic, the IMF forecast that Zimbabwe’s economy would expand by 6% this year and according to the IMF the country would need a fund financial arrangement showing a clear path to a comprehensive restructuring of its external debt, including the clearance of arrears and obtaining financing assurances from creditors.
The southern African country has been in severe economic crisis for years, during which many have helplessly watched their savings evaporate and prices soar while manufacturing and exports have also shrunk as well as the gross shortfall in foreign currency.
