Press Release No. 06/33

Press Release: Zimbabwe Pays Its Overdue Financial Obligations to the IMF Under the General Resources Account

February 15, 2006

Zimbabwe today made a further payment of US$9 million to the International Monetary Fund (IMF), thereby fully settling its remaining overdue financial obligations to the General Resources Account (GRA).¹ Zimbabwe still has substantial overdue obligations to the Poverty Reduction and Growth Facility (PRGF)-Exogenous Shocks Facility Trust (ESF)² amounting to SDR 83 million (US$119 million).

The settlement removes the basis for the Managing Director's complaint with respect to Zimbabwe's compulsory withdrawal from the Fund (see Press Release No. 03/210). Accordingly, the Managing Director withdrew his complaint today, thereby cancelling the procedure for compulsory withdrawal.

The Executive Board is scheduled to conduct its next regular review of Zimbabwe's arrears to the Fund on March 8, 2006. At that time, Executive Directors will have an opportunity to consider Zimbabwe's cooperation with the Fund on policies and payments, as well as the remaining sanctions and remedial measures relating to Zimbabwe's arrears. The sanctions include the suspension of Zimbabwe's voting and related rights in the Fund; ineligibility to use Fund resources under the GRA; declaration of non-cooperation; and suspension of technical assistance.

Because GRA and PRGF arrears are subject to separate legal frameworks-the former under the Fund's Articles of Agreement and the latter under the PRGF-ESF Trust Instrument-the clearance of GRA arrears by Zimbabwe has no effect on the application of the Fund's procedures for the treatment of outstanding arrears to the PRGF-ESF Trust. Zimbabwe, therefore, remains excluded from the list of PRGF-eligible countries (see Press Release No. 01/40)

¹http://www.imf.org/external/pubs/ft/pam/pam45/pdf/PAM45.pdf

² http://www.imf.org/external/np/exr/facts/prgf.htm