IMF to investigate Zim payback
2005-10-13 16:41
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Zimbabwe's President Robert Mugabe says some white farmers will be spared under his controversial land reforms.
Zimbabwe's coalition government still has many challenges to face.
Johannesburg - The International Monetary Fund (IMF) on Thursday said it was investigating the source of Zimbabwe's surprise $120m loan payback in September.
"The executive board of the IMF has asked the staff to verify the sources of these funds. We are in the process of doing that," said Michael Nowak, the deputy director of the IMF's African department.
Nowak said: "A mission will be going at some point to Harare in order to undertake that exercise... that mission hasn't yet taken place."
Nowak said the mission would report back to the IMF's executive board during its next meeting to consider overdue accounts in March next year.
Harare, in arrears since 2001, paid back $120m (€100m) - more than a third of its outstanding debt - to the IMF in September after it threatened to expel the southern African country for non-payment.
It has since paid another $15m to the Washington-based lending body, and said it planned to clear the remaining $160m it owed by late next year.
Zimbabwe's Reserve Bank governor Gideon Gono has said the payback came from "free funds" and export earnings.
But, given the country's dire economic straits, the payment has prompted speculation and suspicion as to its source, with economists adding that Zimbabwe could not afford to spare hard currency given its current shortage.
Nowak said the crisis in Zimbabwe, which is grappling with record-high inflation, unemployment and severe food shortages on the backdrop of political tensions, was like a "cloud over the rest of the region".
But he added that foreign investors had realised that other countries in southern Africa were not planning to go the same route.
He said it was "remarkable" that Zimbabwe had not yet come to a "complete, utter halt".
"It says a lot for the resilience of the economy but it also begs the question of how much longer can the situation actually last for... At some time the economy is going to grind to a halt.
"That's why we are very, very concerned that remedial policy action be taken... (to prevent) a situation where Zimbabwe will never, ever recover to where it was before."
The IMF forecast a five percent decline in Gross Domestic Product growth in Zimbabwe next year compared to an average five percent growth for the rest of the region.
- SAPA