IMF staff and the Zimbabwean authorities have reached agreement on macroeconomic policies and structural reforms that can underpin a Staff Monitored Program; the SMP aims to implement a coherent set of policies that can facilitate a return to macroeconomic stability.

A team from the International Monetary Fund (IMF), led by Mr. Gene Leon, visited Harare, April 1-5, 2019 to continue discussions on a Staff Monitored Program (SMP).

At the end of the visit, Mr. Leon issued the following statement:

“IMF staff and the Zimbabwean authorities have reached agreement on macroeconomic policies and structural reforms that can underpin a Staff Monitored Program. 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. In addition, Zimbabwe is facing the challenge of responding to the adverse effects on agriculture and food security of the el Nino-related drought, as well as the devastation from Cyclone Idai.

“The SMP, which will be monitored on a quarterly basis, aims to implement a coherent set of policies that can facilitate a return to macroeconomic stability. Successful implementation will assist in building a track record and facilitate Zimbabwe’s reengagement with the international community. The policy agenda to be monitored under the SMP is anchored on the authorities’ Transitional Stabilization Program and emphasizes fiscal consolidation, the elimination of central bank financing of the fiscal deficit, and adoption of reforms that allow market forces to drive the effective functioning of foreign exchange and other financial markets. In addition, the agreed policies—both macroeconomic and structural—can be expected to remove critical distortions that have held back private sector growth and to improve governance. The SMP also includes important safeguards to protect the country’s most vulnerable people.

“This staff-level agreement is subject to review by the IMF’s management.”

The IMF staff team met with Finance Minister Ncube, Reserve Bank of Zimbabwe Governor Mangudya, other senior government and RBZ officials, and non-government representatives.