Zimbabwe just repaid a 15-year debt it owed the International Monetary Fund (IMF). The country paid about $108 million, according to a statement released by the IMF.
The clearing of Zimbabwe’s IMF debt can be categorized as the first step the southern African country has made in making itself once again accessible to international loans.
According to the IMF spokesperson Gerry Rice, Zimbabwe is now “current on all its financial obligations to the IMF”.
Since 2001, Zimbabwe has been unable to repay loans granted to it by the IMF. Although this is a good step on Zimbabwe’s part, the IMF insists that this does not make Zimbabwe fit enough to access IMF lending. The IMF said in a statement released on Thursday that Zimbabwe must, first of all, have a plan to repay loans owed to other international financial institutions. Zimbabwe still owes the World Bank and African Development bank about $1.7 billion.
“Access to IMF resources would first require the establishment of a credible plan to clear arrears with other IFIs and with bilateral creditors, in line with applicable Fund policies,” the IMF said in a statement.
“It would also require implementing a strong reform agenda to restore economic stability and foster sustained and inclusive growth.”
The IMF commended Zimbabwe’s fund-monitored advisory program which ended in 2015, the international financial institution added that Zimbabwe will need to make bold reforms in order to get out of the mire of recession.
Zimbabwe is deep in economic crisis plagued by high cases of corruption and unemployment which is rated at 90 %. In 2009, at the peak of Zimbabwe’s hyperinflation, the southern African country adopted the US dollars, but as the dollar strengthens, it affects Zimbabwe’s exports. The country is now considering the use of bond notes.
It is yet unclear how the government was able to raise the money to clear its IMF debt. The government is currently without funds as it has been unable to pay civil workers who make up most of the employed sector.