Harare Pays Down IMF Arrears - But Questions Arise
Though Zimbabwe came up with $120 million to stave off expulsion from the IMF, the institution reportedly wants more information on whe
Though Zimbabwe managed to make a $120 million payment this week to the International Monetary Fund against its debt service arrears of approximately $300 million, a balance of $180 million remains and the Fund wants to know how Zimbabwe came up with $120 million that public accounts apparently did not reflect. On the one hand, Harare has made progress dealing with the debt arrears that have brought it close to the point of being expelled from IMF membership. But on the other hand, the payment has raised questions about its candor with IMF officials. Authorities in Harare meanwhile pursued negotiations with South Africa for a credit line to pay down more of the IMF arrears and purchase food and fuel. Reports said the IMF is concerned Zimbabwe may not have fully disclosed its financial resources to a Fund assessment team that has been in Harare for nearly two weeks. The Business Day newspaper of Johannesburg said the funds came from “undeclared foreign exchange reserves,” which could be perceived as a breach of IMF rules. IMF source confirmed the institution is looking into a possible violation of Article 4 of the IMF Articles of Agreement obliging members to disclose the source of funds. Reserve Bank of Zimbabwe Governor Gideon Gono has said the funds came from exporters with funds on deposit at the central bank, and hard currency holders. Finance Minister Herbert Murerwa told Studio 7 that he was not aware Harare is being probed, saying he did not want to comment on rumors. IMF spokesperson Gita Bhatt said she couldn’t confirm or deny the institution was examining the source of the funds. She said all decisions concerning Zimbabwe rest with the IMF board when it meets as scheduled on September 9.