Zimbabwe pays IMF debt

The Zimbabwean government has paid back US$120 million (A$160.4 million) of the US$300 million (A$401 million) it owes.

A statement by the government was broadcast on state television in which Harare claimed the money demonstrated its commitment to turn its economic fortunes around.

Finance Minister Herbert Murerwa told AFP that it proved “that no one can write off Zimbabwe as yet.”

An IMF team is currently in Zimbabwe for key talks which ended on Wednesday after a two day extension.

South Africa had agreed to step in with a loan to ensure that Harare retains its IMF membership.

Talks held in Pretoria three weeks ago reportedly yielded a tentative agreement on a loan of between 200 to 500 million dollars including about 100 million dollars to be paid to the IMF.

Zimbabwe’s economy has shrunk by 30 percent in the past four years following the seizures in 2000 of about 4,500 white-owned commercial farms which sent agricultural production plummeting.

President Robert Mugabe’s government has blamed drought and sanctions by the European Union and the United States for the country’s economic decline, characterised by triple-digit inflation and high unemployment.

Murerwa recently presented a supplementary budget to pay wages,
import food and build new housing, after admitting that targets for
economic growth and inflation would be missed.

Inflation, already hovering at 164.3 percent in June, shot up to 254.8 percent in July, dealing a blow to the government’s goal of bringing inflation down to 80 percent by year end.

The government is also spending on housing reconstruction in the wake of an internationally-condemned urban cleanup campaign in which shacks, market stalls, shops and homes were demolished.