Press Release No. 04/243

Press Release: Statement by the Director of the IMF African Department, Mr. Abdoulaye Bio-Tchané, at the Conclusion of his Visit to Zimbabwe

November 17, 2004

The Director of the African Department of the International Monetary Fund, Mr. Abdoulaye Bio-Tchané, made the following statement in Harare today:

"I have had a fruitful visit to Zimbabwe these past few days and I want to thank my hosts, Acting Minister Murerwa and Reserve Bank Governor Gono, for a warm welcome and for the quality of our discussions. I also had meetings with several senior officials including the Minister of Special Affairs, Mr. Nkomo, as well as with the ambassadors of several donor countries.

"Yesterday, I had the privilege of meeting His Excellency President Mugabe. My meeting was intended to provide an opportunity for me to explain personally to the President the state of Zimbabwe's relations with the IMF—which are now at a critical juncture—and how we could establish a positive framework for moving forward. Our discussions were informative and cordial and covered a number of issues.

"The President reassured me that Zimbabwe was prepared to have a meaningful relationship with the IMF, even if he did not always agree with its economic advice. He stressed that Zimbabwe needed to grow and prosper as a sovereign nation. In this regard, noting the country's rich agricultural and mining resources, he observed that, with land reform now largely completed, these sectors—particularly mining—needed more investment. He also emphasized that Zimbabwe's prospects were enhanced by the skill level of its workforce, which was the result of substantial public investment in education since independence.

"My discussions with the Zimbabwean authorities covered a range of economic and structural issues facing the country today. I explained that the Fund wanted to work with the authorities to help Zimbabwe achieve its full potential and to integrate the country more closely with the international community. In order for the IMF to help Zimbabwe, the authorities need to seize this window of opportunity to demonstrate strengthened cooperation with the Fund before its Executive Board next considers the issue of Zimbabwe's compulsory withdrawal. I reiterated that strengthened cooperation could be demonstrated through: (i) a comprehensive policy package comprising rapid macrostabilization, substantive structural reforms, and a strengthening of governance to lay the basis for a significant improvement in investor confidence; (ii) concerted efforts to rebuild relations with other official creditors, which over time will also lead to the external financing needed to ensure these policies are sustainable; and (iii) a significant increase in payments to the Fund in line with Zimbabwe's payments capacity. Such an increase should be possible without undue import compression and hardship to the Zimbabwean people if a comprehensive policy package supported by external financing is adopted.

"I hope that in the period ahead, the Zimbabwean authorities can work more closely with us as they implement a comprehensive policy package to improve the welfare of the Zimbabwean people and to strengthen cooperation with the IMF."