Southern African country, Zimbabwe, has reached an agreement with the International Monetary Fund (IMF) regarding its economic reform programme, Reuters has reported.
The program of economic policies and structural reforms could pave the way for fresh engagements with the international body in a bid to secure loans to stimulate the country’s ailing economy.
“Suffering from decades of decline and hyperinflation, Zimbabwe has not been able to borrow from international lenders since 1999, when it started defaulting on its debt. It has arrears of around $2.2 billion with the World Bank, the African Development Bank and European Investment Bank,” the Reuters report revealed.
Gene Leon, who leads the IMF delegation, said in a statement that Zimbabwe is facing deep macroeconomic imbalances, with large fiscal deficits and significant distortions in foreign exchange and other markets, which severely hamper the functioning of the economy.
Zimbabwe is also facing the challenge of responding to drought and the devastation from Cyclone Idai, Leon said.
However, with this current agreement reached, reforms to allow market forces to drive the functioning of foreign exchange and other financial markets will now be adopted by Zimbabwe as well as policies that will focus on eliminating the government’s fiscal deficit, which is currently at double digits.