Home » Governance » Parly Committee Takes IMF to Task

Members of Parliament yesterday asked the International Monetary Fund (IMF) whether it was ostracising Zimbabwe along political lines by refusing to extend financial support to Zimbabwe while extending support to other nations which owe the institution much more than Zimbabwe owes.

The Parliamentary Portfolio Committee on Budget and Finance wanted the head of the IMF mission, Mr Domenico Fanizza, to clarify why the Bretton Woods institution has maintained that Zimbabwe will not receive financial assistance from the fund due to a debt overhang when other nations who also owe the Bretton Woods institutions were receiving monetary support.

Using Greece as a case study, members of the committee put it to Mr Fanizza that the IMF is probably following the political isolation of Zimbabwe to determine whether the country could receive support.

Zimbabwe owes the IMF and other bilateral and multilateral institutions, close to $10 billion and has started making token payments to extinguish the debt.

The MPs said Zimbabwe is being treated differently.

“I think the fund is operating with some conditionalities clear arrears first then we go to the next stage. It is very important that Zimbabwe gets a plus before we talk of the Paris Club. Zimbabwe is a member of the IMF and if the patient is sick you don’t wait for the patient to die first before you help. You should prescribe some medicine that will enable the patient to survive,” said one MP.

The chairperson of the committee, Mr David Chapfika, suggested that the Bretton Woods institutions consider creating a special purpose vehicle to house Zimbabwe’s debt.

“A special purpose vehicle targeted at the bilateral and multilateral debt which has also burdened the State with a structured repayment period using the abundant resources that Zimbabwe has. If there was will within the IFIs to create such a vehicle Government will comply. But it would appear that there is this political thing which seems to be frustrating that,” said Mr Chapfika.

“We have gone for 15 years now starved of the abundant resources within the international financial institutions,” he said.

But Mr Fanizza said that from the fund there is broad support for the re-engagement of Zimbabwe.

“That’s a fact. Clearly there was no one that opposed the idea of the Staff Monitored Programme (SMP). We need to push the process forward, we need to create consensus,” said Mr Fan- izza.

He said Greece was not in default of its repayments like Zimbabwe that is why it continues to receive financial support from the IMF.

The IMF mission is in the country for the new SMP and Mr Fanizza said the programme is on course.

Source : The Herald