Zimbabwe - ZANU PF Mthuli Ncube Letter to IMF - Full Text & Pictures
Zimbabwe Finance and Economic Development Minister, Mthuli Ncube letter (leaked) to the International Monetary Fund (I.M.F)
Zimbabwe Finance and Economic Development Minister, Mthuli Ncube letter (leaked) to the International Monetary Fund (I.M.F)
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Dear Madam Kristalina Georgieva
Managing Director International Monetary Fund
REF: DEBT RELIEF AND ARREARS CLEARANCE STRATEGY FOR ZIMBABWE TO SUPPORT
THE AUTHORITIES’ RESPONSE TO THE GLOBAL COVID-19 PANDEMIC
Introduction
The global COVID-19 Pandemic is expected to have a devastating health,
humanitarian and economic impact on Zimbabwe. Domestic resources to allow the
authorities to mitigate the impact of the pandemic are insufficient and access
to external financing is severely constrained due to external debt arrears. The
Zimbabwean authorities propose a high-level dialogue on mitigating the economic
and social downfall from COVID- I 9 Pandemic through transformative arrears
clearance and re-engagement plan; short of which the country will suffer a
health and economic catastrophe. Immediate financial support for health
spending and the normalization of relationships with Zimbabwe’s creditors both
bilateral and multilateral will be indispensable for as to be able to respond
effectively to the global pandemic. As elaborated below, the Government is
committed to undertake critical economic. governance, and political reforms.
COVID-19 Pandemic Exacerbates an Already Difficult Economic Situation
With cases increasing and the risks of a major outbreak very high,
Zimbabwe must urgently scale up the emergency preparedness and containment
response, to ensure that its health sector can respond accordingly and to
minimize economic and social disruption from the global pandemic. The
Government has prepared a comprehensive response strategy, but is short on the
resources required to implement this strategy.
The Zimbabwean economy contracted sharply in 2019, amplified by climate
shocks that crippled agriculture and electricity generation. Growth is projected
to contract further in 2020. with domestic demand expected to be significantly
depressed from the lockdown put in place as a preventive measure to stop the
spread of the virus. Cumulatively, Zimbabwe’s economy could contract by between
15 to 20 percent during 2019 and 2020 – this is a massive contraction with very
serious social consequences. Already, 8.5 million Zimbabweans (half of the
population) are food insecure, from Cyclone Idal and successive droughts,
health services are inadequate and poverty levels are rising. These indicators
are expected to worsen.
A Case for Immediate Financial Support for Zimbabwe
Zimbabwe desperately needs urgent international support. The global
pandemic will take a heavy toll on the health sector, with many being lives
lost, and raise poverty to levels not seen in recent times, including worsening
food insecurity. A domestic collapse also would ha, potentially adverse
regional effects, where spillovers are significant.
The international community is seeking to provide significant amounts of
financial assistance to LICs to counter COVID-I 9 Pandemic. As part of this.
you Madam as the Managing Director of the IMF and the World Bank Group
President have called for debt relief for LICs to sup, their responses to the global
pandemic. Despite its needs and low-income count, status. Zimbabwe is not
eligible to benefit from these initiatives because of its official external
debt arrears.
In this regard, Zimbabwe is proposing a high level and urgent dialogue to
advance a transformative financial support and arrears clearance plan that can
mitigate the looming crisis. Immediate financial sup, for urgent health
spending and the normalization of relationships with Zimbabwe’s creditors both
bilateral and multilateral, will both be indispensable for us to be able to
respond effectively to the global pandemic. The World Bank Group (WBG,
estimates a financing gap of almost US$ 1billion in 2020 to finance spending
for health, education. food security and social protection. Of this amount,
about US$ 200 million is needed for unplanned COVID-19 Pandemic
expenditures.
Compensation of Former Farm Owners Affected by the Land Reform Program
• Completion by June 2020 of the exercise to determine the Compensation
Figure and signing of the Compensation Agreement with the Compensation Steering
Committee of the former farm owners.
Political Reforms
• Government has already repealed POSA;
• AIPPA repeal has been approved by Parliament through the approval of
the Freedom of Information Bill which awaits the President’s signature;
• Government will issue a time-framed program of aligning all national
laws to the 2013 Constitution;
• Government will provide a time-framed program for the omnibus Bill on
Electoral Reforms, including setting up of a Parliament, Over-Sight Committee
to implement the reforms before the constitutionally mandated next general
elections; and
• Government to continue with the process of engaging in National
Dialogue.
Coordination
The Government is proposing to have a holistic effort, which is
well-coordinated and monitored by the IMF, WBG, and MOB, to ensure consistency
in the financial support, near-term macroeconomic stabilization, and long-term
sustainable private sector-led growth, and allow us to build a track record
towards macro-stabilization and potential future debt relief.
Please be assured of my highest consideration.
Hon. Prof. M. Ncube
Minister of Finance and Economic Development
Cc. Hon. C. Chiduwa, Deputy Minister for Finance and Economic
Development;
Dr. M.J.M. Sibanda. Chief
Secretary to the President and Cabinet;
G. Guvamatanga, Secretary for
Finance and Economic Development.
Dumisani Mahlinza. Executive
Director, International Monetary Fund
Patrick Amir Imam, Resident
Representative for Zimbabwe, International Monetary Fund
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Mthuli Ncube Letter to IMF - Full Text & Pictures
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Sunday, May 03, 2020
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