HARARE, March 5 — The International Monetary Fund (IMF) says Zimbabwe is on course to meet targets set under the successor Staff Monitored Program (SMP) to run until the end of this year.

Zimbabwe requested for a successor SMP with the IMF last October after expiry of the initial one in June last year to bolster economic reforms it is undertaking to turn around the economy. A team from the IMF, which is in Harare until March 11, is conducting the first review of the successor SMP.

The head of the IMF delegation, Domineco Fanizza, told the Parliamentary Committee on Budget and Finance here Wednesday that Zimbabwe was making strides in meeting its SMP targets.

Fanizza said Zimbabwe had met targets such as reduction of domestic arrears while it had also implemented important reforms, particularly in the financial services sector.

“Our preliminary assessment is that the programme is on course. The government has maintained the right policy direction. It looks like there is good news. We have seen a successful performance in very difficult economic conditions in particular the fiscal targets,” he added.

Fanizza said this had shown that Zimbabwe was serious about re-engaging with the international community. He said it was now more than 15 years since Zimbabwe had been cut off from international financial support, hence it was important to reconstruct relations.

“It (the SMP) is an essential step in building momentum in the process of re-engaging with the international financial community and in particular with the international financial institutions the IMF, the World Bank and the African Development Bank,” he said.

“We have said it is a difficult path, it is challenging but it is worth pursuing. We do not believe and I think we agreed with the government of Zimbabwe that the deep-seated problems of the Zimbabwean economy can be addressed without the financial support of the international community and in that view we believe that the time has come for Zimbabwe to turn the page and regain access to the financial support of the international community.”

Fanizza, however, ruled out the possibility of rescheduling Zimbabwe’s debts or providing immediate financial support until it had cleared its arrears. “We can provide financial assistance only when there is an agreement on how to solve those arrears,” he said.

“We are working with authorities and with other financial institutions in order to identify a strategy together it is not a simple process because a lot of consensus requires your support also because the policies that we have agreed under the SMP should be implemented.”

He said it was important for Zimbabwe to implement deep economic reforms, attract more foreign investment, improve infrastructure and reduce the cost of doing business in order to grow the economy.

Under the successor SMP, Zimbabwe has committed to undertaking economic reforms by consolidating its fiscal position so that more resources are allocated towards infrastructure and social spending, clarifying the
indigenization programme and to restore confidence in the financial services sector.

While the SMP does not entail financial assistance by the IMF, it represents Zimbabwe’s first agreement with the IMF in more than a decade while its successful implementation would be an important step for re-engagement with the international community.

Under the SMP, the IMF undertakes to assist Zimbabwe put its public finances on a sustainable course while protecting infrastructure investment and prioritizing social spending, strengthening public financial management, reducing financial sector vulnerabilities and restructuring the central bank.

The country owes the World Bank more than 1.0 billion US dollars and the IMF more than100 million USD, among other creditors.