Connect with us


Why Zimbabwe didn’t get IMF Covid-19 debt relief




Zimbabwe has been sidelined by the IMF from debt relief availed by the international lender to cushion against Covid-19 virus.

The International Monetary Fund (IMF) has announced half a billion United States dollar debt service relief fund for the world’s poorest and vulnerable economies to help them fight and contain the spread of the Covid-19 pandemic.

Twenty-five affected countries, including several African countries, have been selected to benefit from the debt relief package. However, Zimbabwe is not among economies that have been earmarked as beneficiaries; all because of a technical condition one must meet to qualify.

The countries that will receive debt service relief are Afghanistan, Benin, Burkina Faso, Central African Republic, Chad, Comoros, DRC, The Gambia, Guinea, Guinea-Bissau, Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.

Finance and Economic Development Minister Professor Mthuli Ncube, yesterday said Zimbabwe did not expect to benefit from the money because it does not fall under countries to receive debt relief.

“Zimbabwe does not owe money to the IMF as we paid off loans with the world body.

“The support was mainly for countries that owe the IMF and are receiving relief on payments to the body in order to support the Covid-19 response,” said Prof Ncube.

An independent economic analyst Moses Chundu also concurred with Prof Ncube and said; “It is nothing political, but just something technical emanating from the fact that we cleared what we owed to the IMF.”

According to IMF managing director Kristalina Georgieva, the relief applies to member countries affected by the global pandemic, but critically, those that owe the Bretton Woods institution and whose obligations fall due in the next two months, so they can direct their scarce resources to the deadly health emergency and economic recovery programmes. Declared by the World Health Organisation (WHO) as a global emergence, Covid-19 has killed tens of thousands across the world and infected over a million others.

The impact, however, has been massive in the USA, Italy, Spain and China. Zimbabwe has recorded 14 cases of Covid-19 including three deaths since December 2019 when the virus was discovered in Wuhan, China. In contrast, while Zimbabwe is struggling with a US$2,2 billion debt to International Financial Institutions (IFIs), including the World Bank and African Development Bank, Harare cleared its outstanding position of US$107,9 million with the IMF in October 2016.

This makes the country technically ineligible to  receive relief funds. It is also because of unpaid overdue debts that despite being current on its obligations to the IMF, Zimbabwe is still not eligible to borrow concessionary funding from the global lender in line with the pari passu principle that requires equal treatment of multilateral and bilateral lenders, except if this condition is waived.

A senior IMF official in Harare, commenting on condition of anonymity, said Zimbabwe does not qualify because of the arrears to WB, African Development, European Investment Bank and bilateral creditors.

“This is as far as traditional channels are concerned.

“We are looking if there are other ways/other funds, but it’s not promising,” the official said.

There, however, already have been futile efforts from some quarters to politicise the relief issue as evidence that Zimbabwe continues to be overlooked by the global community over political reasons such as the basis on which the nearly two decades long illegal western sanctions are founded.

Commenting on claims US had blocked IMF from giving Harare a part of the relief grant, the official said: “Zimbabwe was being blocked at the bilateral level where Washington will not allow a restructuring of an unspecified debt owed by Zimbabwe.”

The latest relief package has been extended from 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 on members owing the IMF.

“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 UK and US$100 million provided by Japan as immediately available resources.

“Others, including China and the Netherlands, are stepping forward with important contributions,” she said in a press statement released yesterday.

In fact, Zimbabwe saw the removal of remedial measures applied to it by IMF because of overdue financial obligations to the Poverty Reduction and Growth Trust (PRGT), effective November 14, 2016, after clearing its outstanding arrears.

These measures included declaration of non-cooperation with the IMF, the suspension of technical assistance to the country and exclusion from participating in most IMF funding programmes. On October 20, 2016, Zimbabwe fully settled its overdue financial obligations to the Poverty Reduction and Growth Trust (PRGT) using its special drawing right  (SDR), equivalent of liquid funding, holdings.

The country had been in continuous arrears to the PRGT since February 2001, before the Government started making regular monthly payments of US$0,15 million each year since 2013. In February 2015, the IMF established a Catastrophe Containment and Relief (CCR) Trust, transformed Post-Catastrophe Relief Trust, to expand the scope of its global relief efforts during disaster periods.

This allows the Fund to provide grants for debt relief for the poorest and most vulnerable countries that are hit by catastrophic natural disasters or public health disasters. The relief on debt service payments frees up additional resources to meet exceptional balance of payments needs created by the disaster and for containment and recovery efforts.

The new trust complements donor financing and the Fund’s concessional lending through the Poverty Reduction and Growth Trust (PRGT). Assistance through the CCR Trust is currently available to low-income countries eligible for concessional borrowing through the PRGT and which also have either a per capita income below the IDA Operational Cutoff (currently US$1,215) or, for small states with a population below 1,5 million and a per capita income below twice the IDA Cutoff (currently US$2 430).

The CCR Trust has two windows namely post-Catastrophe and Containment. Eligible low-income countries that are hit by public health disasters as defined the global fund would receive up-front IMF grants to immediately pay off their upcoming debt service to the IMF on eligible debt. The amount of grant support is capped at 20 percent of a country’s approved borrowing quota.

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply


Watch: South Africans give notice to foreigners to leave SA before June 16



With no sign of economic hardships disappearing in Zimbabwe, those who have escaped to South Africa are living in fear as locals have threatened to chase them if they don’t leave on their own accord.

Warnings of an operation to get South Africa rid of foreign nationals on the 16th of June continue to circulate.

Recently, a video surfaced on social media showing the ogarnisers of the operation dubbed, OPERATION DUDULA serving seven day notices to some foreign nationals to vacate the country.


– reads the notice.

While the poster specifies that illegal foreigners will be targeted it however does not state that documented ones will be spared.

Such attacks, as occurred before, ended up targeting all immigrants regardless of their status.

Dudula which means “push” brings horrific and sad memories of xenophobic attacks that happened in the country in 2015. Many people were killed, some burnt alive, while some were left homeless as their homes were destroyed.

Just like it happened before, the South African Police Services (SAPS) ignored warnings of imminent attacks on immigrants which then led to the bloodshed.

Similarly, at this point, the SAPS or any government have not said anything about the threats on foreign citizens in their country.

In one of the videos circulating online, the pro Dudula Operation people can be heard blaming the loadshedding on illegal connections supposedly done by foreign nationals.

Local truck drivers have been at loggerheads with their foreign counterparts accusing them of stealing their jobs and accepting low wages and inhuman working conditions.

The situation has left the Zimbabwean and other foreign drivers prone to abuse even when they are legally in the country.

Members of a local drivers organisation, well known for violent attacks on drivers and trucks, have been targeting foreign drivers sjamboking them while recording videos which are then spread online.

They do this to humiliate their victims and instill fear on their colleagues.

No reports of arrest of the perpetrators have been made yet.

For the Zimbabweans and other foreigners in the country, it remains to be seen if they will still call South Africa home after the June 16 2021.

The date concides with South Africa’s youth day when they commemorate the heroics of the youths of 1976 who were massacred by the army after revolting against apartheid.

Continue Reading


Fraudster arrested after swipping for $390 000 groceries



A fraudster has been arrested after he swiped for groceries worth more than $398 000 at OK Supermarket in Hwange using a bank card that had been tampered with.

The man, Brian Pedzisa of Chitungwiza, was arrested on Thursday and is suspected to be among a gang of people who have been using cloned cards and other bank card related tactics to con various retail shops across the country.

Detectives on Thursday pounced on Pedzisa at the supermarket, moments after he was about to get out after swiping for groceries worth $396 384.

Matabeleland North provincial police spokesperson Inspector Glory Banda confirmed the incident and said police were now looking for two other people linked to the sca

“On 10 June 2021 a gang of three fraudsters tried to defraud OK Hwange Supermarket of groceries worth $396 384.

One of the fraudsters successfully used an electronic Visa card to make purchases but before he could make off he was arrested by a team of watchful detectives who were working on a tip-off. Upon being interviewed the suspect revealed that he was working with two other accomplices who are still at large,” said Insp Banda.

He said the gang had used the same strategy to defraud OK Mart Victoria Falls of an undisclosed amount in groceries. He appealed to members of the public to assist with information leading to their arrest.

“The two accomplices are on the run anyone with information that could lead to the arrest of these two criminals can report at the nearest police station,” said Insp Banda.

He called on shop owners to enhance security to avoid such incidents which were on the rise in the country.

“As police we would like to implore shop owners to enhance security at their premises through use of alarm systems and Closed Circuit Television. Retailers should examine electronic cards and do necessary verifications before processing of electronic transactions. For the record some fraudsters misrepresent themselves as humanitarian workers.”

According to sources privy to the incident, the gang would approach the supermarkets seeking a quotation for groceries pretending that the transaction wanted would be effected from a nostro account. Later one of the gang members would return to make purchases using a Visa card whose microchip would have been tampered with. Sunday News

Continue Reading


Gutu Inter-Africa bus and Honda Fit accident victims all from same family



GUTU- Police has announced names of the Gutu accident victims who were involved in a Honda Fit – Bus collision along the Gutu- Chivhu Highway yesterday.

The five were killed when their vehicle collided head-on with an Inter-Africa Bus near Matizha Business Centre in Gutu.

National Police Spokesperson Insp Paul Nyathi announced the names of the deceased family members who were travelling from Harare as Francis Chagweda (33)the driver, Mavis Chagweda (61), Lloyd Chagweda (31), Viola Chagweda (35) and Keresensia Mapaaona (28).

According to a family member, Oscar Chagweda the now deceased were travelling to Chiwara in Gutu for a family function when the tragedy happened.

An eyewitness told I ZIM that the accident occured after the Inter-Africa bus tried to overtake another bus. “It then encroached onto the lane of the oncoming Honda fit which swerved to avoid collision,” said the witness.

The Honda fit reportedly swerved off the road but the bus did the same resulting in the head on collision.

Only one person from the car survived the horific accident and was taken to Matizha clinic before she was transferred to Gutu Rural Hospital for treatment.

During the covid-19 induced Lockdown, government banned private kombis allowing only those registered under ZUPCO to operate resulting in little non-commercial vehicles overloading passengers.

Yesterday, Vice President Constantino Chiwenga who doubles as the Health and Child Care Minister announced another Covid -19 regulations which gave a waiver to public transport operators.

However, the transport sector is also now dominated by “mushikashika” vehicles some of which include Toyota Wish and Honda fit vehicles who have the capacity to carry 4 or 5 passengers , however some of these vehicles end up carrying as many as nine passengers.

Continue Reading


Copyright © 2021 I ZIM. For Zimbabweans By Zimbabweans