IMF Urges Zimbabwe to Boost Transparency

imf-logoHarare: The International Monetary Fund (IMF) stated that Zimbabwe remains committed to implementing the policies and reforms that were agreed to with an IMF-monitored program and to stay engaged with international financial institutions. The program marked its first anniversary this month and while the IMF suggested a number of guidelines to stabilize Zimbabwe’s economy, the organization also concluded that the government must fully implement controls to boost transparency in the diamond sector and to modernize mining legislation.

One measure the country implemented following general elections in July 2013, was to drive sustainable development and social equity through a new five-year development plan, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZIM ASSET). Nonetheless, the IMF found that progress on its monitored program has been mixed, reflecting a long electoral process coupled with a protracted post-election transition. But the monitor’s progress report indicated that Zimbabwe is interested in a successor monitor to build on achievements this past year and to support a stronger policy framework moving forward.

The IMF projected Zimbabwe’s real gross domestic product (GDP) to grow 3.1 percent to an estimated $13.5 billion in 2014, which is a slightly lower rate of growth from this past year. Zimbabwe’s GDP growth jumped 11.9 percent in 2011 and rose 10.6 percent in 2012 before cooling to 3.3 percent in 2013. The IMF assumed a medium-term outlook for growth at an average of 4 percent as large mining sector investments reach full capacity. Zimbabwe’s current account deficit is expected to improve but it will remain high, averaging 15 percent of the GDP. Zimbabwe’s current account deficit widened to 28.7 percent of the GDP in 2013, as the trade deficit deteriorated due to lower mineral exports.