The International Monetary Fund (IMF) is demanding that the cash-strapped Zimbabwe pay up its debt of $1bn, before it could loan the country any more money.
Zimbabwean Prime Minister, Mr. Morgan Tsvangirai has just raised pledges totaling $500m out of the $10 billion estimated to help rebuild Zimbabwe’s battered economy, and cannot afford to give it all as debt to the IMF.
The Zimbabwe economy has been battered by years of hyperinflation. According to Business reporter, Jorn Madslienthe Zimbabwean economic problem is a challenge of biblical proportions.
Most of Zimbabwe’s schools and hospitals are closed, its roads and sewers are in tatters, and at least eight in 10 people out of work; there is no shortage of areas where expenditure can be clocked up.
According to the Economist Intelligence Unit, the impact ofthe global downturn on Zimbabwe has been particularly severe, leading to the collapse of basic infrastructure, especially electricity and water supplies.
Despite the IMF’s snub and Zimbabwe’s unrealistic task, reports yesterday claimed that the Commonwealth group is planning roundtable meeting to gather support, in terms of aid, for the country.
The group aims to consolidate “medium to long-term prospects for reconstruction and development” in the country.
Zimbabwe’s Finance Minister, Tendai Biti said financial aid of around $10 billion could help the country’s economy grow by about 6% this year. “I think we will be able to achieve a growth rate of at least 6%, although conservatively it will be 4% in 2009,” the finance minister was quoted as saying at the World Economic Forum on Africa held last month in Cape Town.
The US has so far promised $73m in aid while the UK pledged to boost its funding by about $8m. China, on the other hand, recently agreed to give Zimbabwe a loan of $950m.