Harare – Bond notes alone won’t address Zimbabwe’s cash challenges, a top International Monetary Fund official has said.
IMF African Department Director Abebe Aemro Selassie said at a press briefing in Washington on Sunday that a “holistic package of reforms” was needed to “get Zimbabwe out of the place it’s in right now.”
“We think that, going down this one note route, in and of itself, will not address the challenges that the country has,” Selassie said, according to a transcript of the briefing.
“It’s very important to have a more comprehensive policy package which also addresses a lot of the fiscal challenges that the country faces, a lot of the structural reforms that have to be done,” he said in answer to a question on Zimbabwe’s bond notes.
Central bank governor John Mangudya has just indicated that he will stop injecting the new notes – only introduced last November – into the economy for now until, what he calls, “fiscal discipline” is reached.
Although initially the governor promised to introduce $200m of the notes, so far $121m worth of them have been brought in (or possibly $130m: conflicting figures have been used in the state press.)
President Robert Mugabe’s government insists the bond notes are at a parity with the US dollar but there have been cases of retailers insisting on different prices depending on the method of payment.
Those with “real” US bills pay less.
A technical mission from the Washington-based lender visited Zimbabwe last month.
The southern African country cleared its 15-year-old financial arrears with the IMF late last year.
It did this by transferring part of its cash holdings at the IMF to the Fund’s Poverty Reduction and Growth Trust.