The Zimbabwe government has started implementing policy measures aimed at addressing the 2014 fiscal gap, improving the quality of public expenditures and enhancing financial sector stability, the International Monetary Fund said on Tuesday.
In a statement after completing the first and second reviews of its Staff Monitored Programme, the IMF said Zimbabwe had taken corrective measures to ensure a track record of policy implementation going forward.
“The authorities have reiterated their continued commitment to the policies under the SMP and to enhanced engagement with their creditors and the international community. A successful conclusion of the third review could pave the way to a successor SMP, which the authorities have indicated they may request, to build on their achievements and support a stronger policy framework,” it said.
Progress in implementing the SMP was slowed by a long electoral process and a protracted post-election transition, as well as an adverse external environment, the IMF said.
The IMF and the European Union have been scrambling to engage Zimbabwe after more than a decade of isolation, but some critics say the IMF medicine is usually worse than the disease.
Full statement:
Zimbabwe- IMF Management Completes First and Second Reviews of Staff-Monitored Program
Press Release No.14/333
July 8, 2014
On June 27, 2014, Management of the International Monetary Fund (IMF) completed the combined first and second reviews under the Staff-Monitored Program (SMP) with Zimbabwe.1 An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic program.2 The SMP represents Zimbabwe’s first IMF agreement in more than a decade.
The Zimbabwean authorities’ performance under the SMP has been broadly satisfactory and the authorities have taken corrective measures to ensure a track record of policy implementation going forward. The SMP provided a useful anchor for Zimbabwe in a difficult election year. However, progress in implementing the program was slowed by a long electoral process and a protracted post-election transition, as well as an adverse external environment. Thus, a number of quantitative targets and structural benchmarks were not met.
The authorities have began implementing policy measures aimed at addressing the 2014 fiscal gap, improving the quality of public expenditures, enhancing financial sector stability, and moving forward delayed structural reform measures. The authorities have reiterated their continued commitment to the policies under the SMP and to enhanced engagement with their creditors and the international community. A successful conclusion of the third review could pave the way to a successor SMP, which the authorities have indicated they may request, to build on their achievements and support a stronger policy framework.
IMF staff will remain engaged with the authorities to monitor progress in the implementation of the authorities’ economic program, and will continue providing targeted technical assistance to support Zimbabwe’s capacity-building efforts and its adjustment and reform program.
1 A staff-monitored program is an informal and flexible instrument for dialogue between the Fund staff and a member country on its economic policies. It is not accompanied by financial support.
2 SMPs do not entail financial assistance or endorsement by the IMF Executive Board.
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