Cash-strapped Zimbabwe did not qualify for the International Monetary Fund (IMF)’s immediate debt service relief to poor and vulnerable countries since the country no longer owes the multilateral financial institution, an economist has said.
IMF on Monday announced immediate debt service relief to 25 poor and vulnerable countries excluding Zimbabwe, in the wake of COVID-19, which has placed a financial burden on many nations globally.
Of the 25 countries set to benefit from the multilateral financial institution, 19 are from sub-Saharan Africa and the exclusion of Zimbabwe, whose economy is one of the worst performing in the world, had left many with unanswered questions.
However, economist, Dumisani Sibanda, explained that Zimbabwe’s exclusion, was not anything sinister, since the country does not owe the Bretton wood institution, having cleared its US$107, 9 million debt in 2016.
“Zimbabwe has no debt with the IMF, having cleared it,” explained Sibanda.
“It does not fall under the nations that were given the reprieve by the IMF.”
The list of beneficiaries includes Southern African countries such as Mozambique, Malawi, Madagascar, Comoros and the Democratic Republic of Congo.
“Today, I am pleased to say that our Executive Board approved immediate debt service relief to 25 of the IMF’s member countries under the IMF’s revamped Catastrophe Containment and Relief Trust (CCRT) as part of the Fund’s response to help address the impact of the COVID-19 pandemic,” IMF Managing Director, Kristalina Georgieva, announced in Washington this week.
“This provides grants to our poorest and most vulnerable members to cover their IMF debt obligations for an initial phase over the next six months and will help them channel more of their scarce financial resources towards vital emergency medical and other relief efforts.
The CCRT can currently provide about US$500 million in grant-based debt service relief, including the recent US$185 million pledge by the U.K. and US$100 million provided by Japan as immediately available resources.”
She added: “Others, including China and the Netherlands, are also stepping forward with important contributions. I urge other donors to help us replenish the Trust’s resources and boost further our ability to provide additional debt service relief for a full two years to our poorest member countries.”
Zimbabwe has not been accessing funding from multilateral institutions such as the IMF, World Bank, European Investment Bank and the African Development Bank since the country defaulted on its debt in 1999.
While the country no longer owes the IMF its external debt to other multilateral institutions stands at over US$8 billion.