IMF welcomes Mnangagwa's promise to revive Zimbabwe economy

Zimbabwe's President Emmerson Mnangagwa attends the annual World Economic Forum (WEF) on January 24, 2018 in Davos, eastern Switzerland. PHOTO | AFP 

By REUTERS

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Summary

• International donors withdrew support for Mugabe’s government after he imposed policies that included violent seizure of white-owned commercial farms.
• The country has not been able to borrow from international lenders since 1999 when it started defaulting on its debt.

Washington

IMF chief Christine Lagarde on Thursday welcomed a commitment by Zimbabwe’s new President Emmerson Mnangagwa to stabilise the country’s economy and work to improve relations with the international community.

Lagarde met with Mnangagwa on the sidelines of the World Economic Forum in Davos, Switzerland.

It was their first meeting since Mnangagwa took power in November when the military ousted Robert Mugabe, who ruled for 37 years.

“This was an opportunity to share views on ways to address the severe economic challenges that Zimbabwe is facing, and how the IMF can help,” Lagarde said on Twitter after the meeting.

Afterward, the International Monetary Fund said Lagarde “welcomed President Mnangagwa’s commitment to stabilising the Zimbabwean economy and working towards normalising the country’s engagement with the international community.”

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Withdraw support

International donors withdrew support for Mugabe’s government after he imposed policies that included violent seizure of white-owned commercial farms.

The country has not been able to borrow from international lenders since 1999 when it started defaulting on its debt.

The country cleared its 15-year-old financial arrears to the IMF in 2016. It is, however, still in arrears to the World Bank and African Development Bank, which hampers its ability to tap development financing from the two institutions.

The IMF has told Zimbabwe not to clear its $1.75 billion foreign arrears by borrowing from lenders, which would worsen the country’s debts.

Instead it has suggested cuts to public sector wages, reducing farm subsidies, improving transparency in the mining sector and reaching an agreement on compensating farmers.

READ: Five things we learnt about democracy in Africa in 2017

Transparent elections

Addressing an audience in Davos on Monday, Mnangagwa promised to hold transparent elections by July and said he would respect the outcome of the vote even if the opposition wins.

The election will be the first big test of his legitimacy since he took power