Press Release: IMF Executive Board Restores Zimbabwe's Voting Rights and Takes Steps Towards Unfreezing Access to the General Resource Account
February 19, 2010Press Release No. 10/53
February 19, 2010
The Executive Board of the International Monetary Fund (IMF) decided today to restore Zimbabwe’s voting and related rights, and its eligibility to use resources from the IMF’s General Resources Account (GRA), following a request from Zimbabwe’s Finance Minister Tendai Biti.
Notwithstanding the restoration of the eligibility to use GRA resources, Zimbabwe will not be able to use resources from the GRA or the Poverty Reduction and Growth Trust (PRGT) until it fully settles its arrears to the PRGT (SDR 89.4 million or about $140 million). Access to IMF lending resources is also subject to IMF policies on the use of such resources, including a track record of sound policies and the resolution of arrears to official creditors, which would require donor support. Following today’s decision any remaining issues on further normalization of relations will be addressed over time.
A number of remedial measures remain in place, as Zimbabwe still has outstanding arrears to the PRGT. These are (i) the declaration of non-cooperation; (ii) the suspension of IMF technical assistance, except in targeted areas (see below); and (iii) the removal of Zimbabwe from the list of PRGT-eligible countries.
In 2001, Zimbabwe started to incur arrears to both the GRA and the Poverty Reduction and Growth Facility (PRGF), now renamed the PRGT. As a result, the IMF’s Executive Board imposed a number of escalating measures. In 2001, the Executive Board declared Zimbabwe ineligible to use the general resources of the IMF, and removed Zimbabwe from the list of countries eligible to borrow resources under the PRGF (see Press release No.01/40). In 2002, the Executive Board adopted a declaration of noncooperation regarding Zimbabwe's overdue financial obligations to the IMF, and suspended the provision of technical assistance to Zimbabwe (see Press release No.02/28). In 2003, Zimbabwe’s voting rights at the IMF were suspended (see Press release No.03/80) and compulsory withdrawal procedures were initiated (see Press release No.03/210). In 2006, Zimbabwe fully settled its GRA arrears to the IMF, which led to a cancellation of the procedures for the compulsory withdrawal (see Press release No.06/33). Subsequently, the IMF Executive Board met in 2006 and 2007 (see Press releases No. 06/45 and No. 07/30) to consider the restoration of Zimbabwe’s voting and related rights and its eligibility to use resources from the GRA, but decided to return to this issue at a later date. In May 2009, in view of a significant improvement in Zimbabwe’s cooperation on economic policies, the Executive Board approved the provision of technical assistance in some targeted areas (see Press release No. 09/152).