Harare - XINHUA
A senior Zimbabwean official on Friday said implementing economic reforms proposed by the International Monetary Fund (IMF) remains the best way possible for the country to be qualify for international debt relief. Zimbabwe sits on a huge public external debt of more than 6 billion U.S. dollars, excluding the debt owed by the central bank and the private sector. The country is also suffering a severe liquidity crunch due to lack of significant foreign direct investment and lines of credit. The unsustainable foreign debt to multilateral institutions has affected the country's capacity to get new financing from the international market. The bulk of the debt dates back to more than a decade ago. The Head of Zimbabwe Aid and Debt Management Office in the Ministry of Finance, Andrew Bvumbe, was quoted by the Herald newspaper as saying that passing the IMF's staff monitored program (SMP) test was key for the country to earn debt relief and unlock new financing channels. "We cannot resolve our debt without the endorsement of the IMF, " Bvumbe said "The gatekeeper is the IMF, without that we are going nowhere." Zimbabwe signed the SMP with IMF in June last year which entails a cocktail of economic reforms, including strengthening public financial management and the banking sector, cutting government's wage bill, and improving transparency in the diamond sector. The SMP was due for first review in December but because of little progress by the southern African country, the IMF in January extended the SMP by six months to allow the government to strengthen its polices. If successful, the program could help the country clear its external debt and give it access to new credit from international lenders. In March this year, Finance Minister Patrick Chinamasa said Zimbabwe will need more time to deal with its huge public sector wage bill, which accounts for roughly 70 percent of the government's annual budget.