Zimbabwe and IMF Schedule Overdue Article IV Consultations
IMF officials have warned that unless Harare urgently changes economic policies, inflation could soar to an average 4,000% rate in 2007
A team from the International Monetary Fund will make a long-delayed visit to Harare in early December to conduct so-called Article IV consultations on the economy and government economic policies, IMF and government sources said Tuesday. IMF Senior External Relations Officer Gita Bhatt confirmed that the team would arrive early next month, while sources in the Ministry of Finance said the mission would run from December 4 through December 16. The purpose of such Article IV visits is to are monitor the compliance of IMF members with previously expressed commitments to adopt recommended economic policies that will foster economic growth while maintaining the stability of prices. The consultation visit to Zimbabwe was initially set for July but was repeatedly pushed off by Harare. Finance Ministry sources, speaking on condition of anonymity, said the delays arose from a widening rift between the government and the Fund, which has criticized the government's economic policies, refused to reinstate the country’s voting rights and declined to extend further credit despite payments made on Zimbabwean arrears. Finance Minister Herbert Murerwa charged last month that the IMF was being used as a tool of Western nations seeking “regime change.” The accusations echoed president Robert Mugabe’s remarks before the United Nations General Assembly in September. The IMF says Harare must put sound economic policies in place to reverse the steep decline of the economy. Zimbabwe is in its seventh year of recession and inflation at last measurement in October was running at 1,070%. IMF officials have warned that unless Harare takes urgent action, inflation could hit an average 4,000% in 2007. Sources said the timing of consultations was an issue. Harare wanted consultations to take place only after the IMF Executive Board had taken up Zimbabwe’s status. But IMF officials were adamant that the Article IV assessment must come first.