Durable macroeconomic stability and structural reforms would support recovery and Zimbabwe’s development objectives; International Monetary Fund (IMF) has said.
This comes after the Dhaneshwar Ghura, led an IMF staff team in discussions held virtually from 25 October to 16 November 2021.
Ghura said, “Decisive actions are needed to lock in economic stabilization gains and accelerate reforms.”
“The mission notes the authorities’ plans to use the recent SDR allocation to support spending in social, productive, and infrastructure sectors, as well as building reserve buffers. In this context, the use of the SDR allocation should not substitute for critical reforms, be spent on priority areas within a medium-term plan, and follow good governance and transparency practices.”
The Mission Chief of Zimbabwe went on to say that the African country’s near-term macroeconomic imperative is to continue with the close coordination among fiscal, exchange rate, and monetary policies.
Key priorities for Zimbabwe relate to allowing greater official exchange rate flexibility and tackling FX market distortions, accompanied by an appropriate monetary stance; creating fiscal space for critical spending while containing fiscal deficits; implementing growth-enhancing structural and governance reforms; and continuing to enhance data transparency.
“These reforms are paramount for improving the business climate and reducing governance vulnerabilities, and thus to foster higher sustained and inclusive growth,” Ghura said.
“To this end, the authorities’ strategy and policies as embodied in their 2021-25 National Development Strategy 1 are appropriate and need to be fully operationalized and implemented.”
The IMF staff held meetings with the Minister of Finance and Economic Development Professor Mthuli Ncube, Permanent Secretary Mr. George Guvamatanga, Reserve Bank of Zimbabwe Governor Dr. John Mangudya, other senior government and RBZ officials, members of Parliament, representatives of the private sector and civil society, and Zimbabwe’s development partners.
The staff team also said Zimbabwe’s economic activity is recovering in 2021, with real GDP expected to grow by about 6 percent, reflecting a bumper agricultural output, increased mining and energy production, buoyant construction, and manufacturing activity, and increased infrastructure investment.
