Zimbabwe: Unstable Economy and Debt Crisis, IMF Refuses Financial Support

Zimbabwe: Unstable Economy and Debt Crisis, IMF Refuses Financial Support

  • The International Monetary Fund has announced that they can't provide any further financial support to Zimbabwe at this time
  • Zimbabwe's unstable economy and outstanding debt need to be addressed before the country can receive funds
  • The fund suggested that Zimbabwe's economy be restructured to eliminate debt and create a viable financial climate

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HARARE - The International Monetary Fund (IMF) has announced that Zimbabwe's longstanding debt and unstable economy make the country an unlikely recipient of any further financial support.

"The IMF is precluded from providing financial support to Zimbabwe due to an unsustainable debt and official external arrears," reads a statement by the fund.

According to eNCA, the IMF would only be open to negotiating a financial agreement with Zimbabwe if the country clears its outstanding debt and gains a clear credit score.

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Zimbabwe, debt crisis
Zimbabwe's current financial situation causes the IMF to refuse the country funds. Image: Jürgen Bätz/picture alliance via Getty Images.
Source: Getty Images

What Zimbabwe's economy needs

IMF staff members visited Zimbabwe from October 16 to November 16 2021. Upon completion of this mission yesterday, the IMF reported that they can see the country is trying to avoid inflation and budget deficits, which the fund commended them on.

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However, Zimbabwe has over $10 billion in outstanding debt, which will take a great effort to clear, News24 reports. The IMF has recommended that Zimbabwe restructure its finances to create an economic climate that would be viable for the fund to assist the country.

The specific restructuring that the IMF recommended Zimbabwe implement includes minimising deficits and flexible exchange rates.

SA included in IMF's R9 trillion emergency funding

Previously Briefly News reported that the International Monetary Fund (IMF) is releasing the largest amount of money in emergency funding in its history.

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The IMF board of governors have agreed to the allocation of $600 billion (R9 trillion) in emergency funding. The funding was generated to help countries fight and recover from the Covid-19 pandemic.

South Africa will get R65 billion injected into its economy and this will help the government recover from the pandemic and violent unrest. The IMF has acknowledged the effect of Covid-19 on South Africa economy, effectively weakening it. It has also noted the impact of the vaccine campaign.

Source: Briefly News

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