The Sunday News
Sydney Kawadza in Cairo, Egypt
The International Monetary Fund (IMF) has been impressed by President Emmerson Mnangagwa’s current economic plan, which has already seen Treasury recording a budget surplus of over $29 million during the first two months of its subsistence.
The Transitional Stabilisation Programme (TSP) — the policy blueprint expected to guide the country through December 2020 — was announced by Finance and Economic Development Minister Professor Mthuli Ncube on October 5 this year.
Responding to an online question during Friday’s edition of IMF’s weekly question-and-answer session, the Fund’s director of communications, Mr Gerry Rice, said “the policies of the new administration under the Zimbabwe transition . . . do constitute a comprehensive stabilisation and reform effort”.
IMF and Zimbabwe, he said, are working on modalities of a new staff monitored programme meant to ensure that the country meets the fiscal targets it has set for itself under the TSP.
“We think the policies, to answer the question, the policies of the new administration under the Zimbabwe Transition and Stabilisation Programme, do constitute a comprehensive stabilisation and reform effort in order to address Zimbabwe’s macroeconomic situation. And, you know, we see it as a fairly ambitious programme that the authorities have requested the staff monitored programme,” said Mr Rice.
He, however, noted that the IMF can only work on a financial programme with Zimbabwe once the country strikes a deal with bilateral creditors and clears its arrears with other international financial institutions.
“I am differentiating that (staff monitored programme) from an IMF financial programme which, of course, discussion of that, as we have said here before, would require the clearance of arrears by Zimbabwe to the other international financial institutions as well as an agreement with official bilateral creditors. So we are looking at a staff monitored programme, but not at this point, the full financial programme for the reasons I just mentioned.”
The country has made remarkable progress in entrenching disciplined economic management by matching its expenditures to its revenues, culminating in the $29 million budget surplus for October. In September, Treasury managed to balance the budget. In essence, the TSP is premised on cutting recurrent expenditure, growing revenues and funnelling more resources to capital projects that are meant to add fillip to local economic growth.
However, an unsustainable domestic and external debt — estimated at over $18 billion, of which $11 is external debt — is presenting significant headwinds to the country’s economic growth effort. Zimbabwe, which cleared its arrears to the IMF, owes the World Bank and the African Development Bank $1,2 billion and $601 million in that order.
Discussions with creditors to consummate an arrears clearance plan agreed at in Lima, Peru, in 2015 are expected to be wrapped up within the next 12 months.
It is believed that the successful conclusion of a deal will naturally increase the country’s creditworthiness and help integrate the country’s private and public sector into the global financial system.
Meanwhile, the mantra “Zimbabwe is Open for Business” is finding takers from the continent and beyond, as participants at the Intra-African Trade Fair (IATF) 2018, which ends tomorrow, were impressed by the local business contingent that showcased its products here.
Over 25 businesses, Government departments and business representative organisations (BMOs) are taking part in the fair at the Egypt International Exhibition Centre. Organised by the African Export-Import Bank (Afreximbank) in partnership with the African Union (AU) Commission — and hosted by the government of Egypt — this year’s edition of IATF has attracted 1 100 exhibitors and an estimated 70 000 visitors.
Enquiries for local products have reportedly been solid and many serious investors are understood to be prepared to make their way to Zimbabwe to scout for opportunities. Industry and Commerce Minister Nqobizitha Mangaliso Ndlovu said in an interview he was hopeful businesses would be able to sign good deals.
“I am also particularly impressed by the exhibition by Zimbabwe at this Fair. I think, really, without necessarily favouring myself, we have outdone everyone here. We have done very well, we have shown that indeed Zimbabwe is open for business. We are negotiating with countries all over Africa and I certainly hope there will be good deals that businesspeople will bring back home.”
The Federation of Egyptian Industries, which represents more than 60 000 enterprises, has since confirmed that it will be sending a delegation to Zimbabwe in March next year. Engineer Mohamed Zani El Sewedy of the El Sewedy Electric — who met Min Ndlovu last week — expressed his keenness to make the journey to Harare; so, too, did Dr Amany Asfour, president of the International Federation for Business and Professional Women.
Afreximbank says deals worth $27 billion, which are more than the initial target of $25 billion, had been signed by the fourth day of the seven-day Fair. The Cairo, Egypt-based institution’s president, Prof Benedict Oramah, said there was immense potential in intra-continental trade.
“We are proud to witness this indication of what the African Continental Free Trade Area (AfCFTA) Agreement can yield for intra-continental trade. By bringing together buyers and sellers under one roof, in the first intra-African trade fair of its nature on the continent, Afreximbank is succeeding in facilitating the transformation and integration of African economies,” he said.
The Zimbabwean business delegation is led by ZimTrade and industry umbrella body Zimbabwe National Chamber of Commerce (ZNCC).
