Zimbabwe to get first IMF loan in 20 years

  • 17/03/2016
Zimbabwe President Robert Mugabe (AAP)
Zimbabwe President Robert Mugabe (AAP)

Zimbabwe expects a loan from the International Monetary Fund in the third quarter of this year, the first since 1999, after paying off foreign lenders by the end of June.

President Robert Mugabe's government last week agreed to major reforms including compensation for evicted white farmers and a big reduction in public sector wages as the government tries to woo back international lenders.

Central bank governor John Mangudya said on Wednesday the IMF would decide the exact amount of the loan to issue at a later date.

The fund had agreed to double the amount available for Zimbabwe, known as a financial quota, to $US984 million, he said.

"We are talking about the third quarter, that's when you see most of the action happening," Mangudya told Reuters in an interview, referring to when Harare expected the loan.

Zimbabwe would also receive an US$896 million loan from an unnamed country to pay off arrears to the World Bank.

In addition, the African Export-Import Bank would provide US$601 million for Harare to clear arrears to the African Development Bank (AfDB).

Zimbabwe would then receive the same amount as a grant from the AfDB, Mangudya said.

The country's foreign debt stands at US$8.3 billion, of which US$1.8 billion is arrears.

Zimbabwe is trying to emerge from years of international isolation, largely blamed on Mugabe's policies, including the seizures of farms from white farmers.

The worst drought since 1992 has left four million Zimbabweans facing hunger.

Mangudya said the drought had forced the government to lower its growth target for 2016 to below two per cent from 2.7 percent.

The IMF and World Bank forecast growth of 1.4 percent and 1.5 percent respectively.

Once Zimbabwe clears its arrears, it would be ready for rating by international ratings agencies, with a view to issue international bonds in future, said Mangudya.