IMF says no financing talks with Zimbabwe before arrears clearance

The International Monetary Fund (IMF) has said it is not discussing any financing program with Zimbabwe, which is pursuing a debt clearance plan with international financial institutions.

Zimbabwe in May hammered a plan to clear 1.8 billion U.S. dollars arrears to the IMF, World Bank and the African Development Bank (AFDB) to unlock fresh capital from the multilateral creditors, which suspended loans to the country at the turn of the century after it started defaulting.

Reserve Bank of Zimbabwe Governor John Mangudya said Thursday significant progress had been made and that Zimbabwe was on track to clear the arrears by December 31, 2016.

Responding to a question during a press beefing in Washington Thursday, the IMF director of communications and spokesman Gerry Rice said talks on financing could only start after Zimbabwe clears its arrears.

“I want to repeat that there’s no financing program under discussion with Zimbabwe at this point. Indeed, the authorities have announced a plan to clear the arrears. Once they are cleared, which they are not at this point, our board would need to discuss that,” Rice said in a transcript of the press briefing seen by Xinhua Friday.

In April, Zimbabwe Finance Minister Patrick Chinamasa said the southern African country was preparing a financing program in anticipation of new funding from the creditors once it clears its arrears.

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The country has proposed to use several funding mechanisms to clear the arrears.

These include utilization of the country’s special drawing rights from the IMF to repay 110 million dollars to the IMF, utilization of a bridge loan of 819 million dollars arranged by the African Export-Import Bank to repay 601 million dollars to the AFDB, and 218 million dollars to the World Bank’s International Development Association.

Zimbabwe would also utilize a long-term loan from a bilateral lender to repay the International Bank of Reconstruction and Development debt arrears amounting to 896 million dollars.Xinhua