MOSCOW, September 27 (RIA Novosti) – Zimbabwe will not be receiving more loans from the International Monetary Fund (IMF) due to the country’s inability to repay its outstanding debt, the BBC reports.
“We cannot [provide loans] in the current situation, because Zimbabwe runs arrears with the Fund and also other institutions like the World Bank and African Development Bank”, Domenico Fanizza, IMF Assistant Director for Africa told the BBC.
Fanizza is also troubled by the fact that Zimbabwe spends more than three quarters of its tax revenues to pay the salaries of more than 250,000 civil servants, and leaves little money to pay down its debt or invest in its crumbling economy.
“The country, to grow, needs investment. This does not happen. There is no money, there is not enough support and all the money that is generated through tax collection goes into paying the wages”, Fanizza added.
Patrick Chinamasa, Zimbabwe’s Finance Minister, agreed with the problem his country is facing, “I am embarrassed that our wage bill is some 76 percent of whatever revenue we receive. It’s not good, it’s not sustainable”. He added the government is working to tackle the issue, according to Reuters.
Long-standing President Robert Mugabe, however, was quick to criticize the European Union (EU) and the United States for his country’s economic failures.
“Because Zimbabwe has thus been pre-occupied with the empowerment of its people economically, she has become a victim of the evil machinations of Western countries, namely the United States of America and the European Union, who continue to apply unilateral and illegal sanctions as a foreign policy tool to achieve short-term political objectives, particularly regime change”, Mugabe said, as quoted by the BBC.
Zimbabwe is recovering from an economic collapse. Extreme hyperinflation has made the Zimbabwean dollar almost worthless. Since last year, the IMF has been guiding the government of Zimbabwe through an economic program that would help the country to manage its $9 billion foreign debt. Once the debt is cleared or at least staved off, much needed international monetary loans would follow.
