The IMF has approved Zimbabwe’s plan to clear billions of dollars of arrears, while Harare has agreed to enter a staff-monitored programme with the Fund, Finance Minister Tendai Biti said on Friday.
The move marks a major step towards Zimbabwe normalising relations with the International Monetary Fund, which suspended its voting rights in 2003 over policy differences with President Robert Mugabe and non-payment of arrears.
“This programme is about showing that Zimbabwe can be trusted again,” Biti told reporters in Harare. “We engaged with the IMF on our terms.”
While its voting rights were restored in 2010, Zimbabwe has not been able to borrow from international lenders since 1999 when it started defaulting on its debt. Its external debt stands at $10.7 billion (6.8 billion pounds).
Biti said the IMF board had agreed to allow Zimbabwe to negotiate debt relief and new financing by leveraging its natural resources.
Under the staff-monitored programme, the IMF would want to see evidence of sound policies before agreeing to a lending programme.
Biti’s comments came after Mugabe said he would hold elections by the end of July in line with a court order, angering rivals who want them delayed to allow for reforms to ensure a fair vote.
Zimbabwe is still emerging from a decade of economic decline and hyperinflation. The economy has slowly been on the mend since the formation of a unity government in 2009, and the government recently projected growth of 8.9 percent in 2013.
It was 4.4 percent last year. – Reuters