THE Reserve Bank of Zimbabwe (RBZ) governor, Dr John Mangudya will today present the 2016 Monetary Policy Statement (MPS) largely expected to give impetus to an economy that has continued to face mounting challenges.
The policy statement comes at a time when the country is grappling with a worsening liquidity crunch, debt distress, unreliable power supplies, falling global commodity prices that have hurt the mining industry which Government has identified as a key sector to drive Zimbabwe’s economic growth, corruption, lack of transparency, low capacity utilisation in industries and lack of competitiveness for locally manufactured products.
Among other things, the central bank chief is expected to clearly spell out the country’s progress in raising offshore credit to finance the country’s debt arrears clearance strategy. Zimbabwe last year tabled proposals to clear $1,8 billion in arrears to the World Bank (WB), International Monetary Fund (IMF) and the African Development Bank (AfDB), to pave way for new funding.
Zimbabwe has been unable to access offshore funding due to international arrears to the multilateral financial institutions and other lenders. The arrears clearance plan, which was presented to international creditors during an IMF and WB annual meetings in October last year by the Government in Lima, Peru, entails Zimbabwe clearing arrears to IMF amounting to $110 million, WB ($1,15 billion) and AfDB ($601 million) by the end of April this year.
The strategy also involves development of a new comprehensive country financing programme supported by the AfDB, the IMF and the WB to attract long-term financing to promote growth and debt sustainability. This would then be followed by engagement with other creditors, such as the European Investment Bank, Paris Club and non-Paris Club members by June.
The plan is to reduce the country’s debt arrears, improve the standard of living in the country and spur economic growth. Spelling out the strategy is important especially given that this is the last MPS to be announced before the deadline date. – Wires.