Zimbabwe quietly clears its arrears to the IMF

Zimbabwe yesterday paid its arrears to the International Monetary Fund, which is usually considered the door-opener to international funding.

A statement issued by the IMF this morning said: “On October 20, 2016, Zimbabwe settled its overdue financial obligations to the Poverty Reduction and Growth Trust (PRGT) of the IMF.

“Zimbabwe had been in continuous arrears since 2001. To settle these obligations, which amounted to SDR 78.3 million (about US$107.9 million), Zimbabwe transferred part of its SDR holdings kept at the IMF to the PRGT account.

“Zimbabwe is now current on all its financial obligations to the IMF.”

Zimbabwe, however, still owes the World Bank and the African Development Bank about $1.6 billion.

Zimbabwe has been living from hand to mouth for nearly 17 years and has been unable to develop its infrastructure as the wage bill now consumes 97 percent of the budget.

It is not yet clear what the impact of clearing the IMF arrears will be but this seems to be a major victory for Finance Minister Patrick Chinamasa and Vice-President Emmerson Mnangagwa who have been fighting to mend relations with international financial institutions and the West in general.

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