Press Release No. 01/40

Press Release: IMF Declares Zimbabwe Ineligible to Use IMF Resources

September 25, 2001

The Executive Board of the International Monetary Fund (IMF) on September 24, 2001 reviewed Zimbabwe's overdue financial obligations to the IMF, 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 Poverty Reduction and Growth Facility (PRGF).

Zimbabwe first incurred arrears to the IMF in mid-February 2001, and at end-August 2001 its overdue obligations totaled SDR 41.3 million (about US$53 million), including SDR 18.9 million (about US$24 million) to the IMF's General Department, and SDR 22.3 million (about US$29 million) to the PRGF Trust.

The declaration of ineligibility to use the general resources of the IMF is one of the remedial measures taken to encourage members to settle overdue financial obligations to the IMF. Removing a country from the list of PRGF-eligible countries is a parallel action when a member has overdue obligations to the PRGF Trust. The IMF's Executive Board urged the Zimbabwean authorities to make full and prompt settlement of Zimbabwe's overdue financial obligations to the IMF. The Executive Board acknowledged the authorities' intention to initiate quarterly payments to the IMF as a first step of cooperation with the IMF, but regretted that those payments would fall far short of the amount required to stabilize the level of arrears to the IMF.

The Executive Board urged the Zimbabwean authorities to adopt the economic and financial policies needed to enable Zimbabwe to achieve economic recovery as soon as possible. The Executive Board indicated that the Fund stood ready to cooperate with the authorities in support of efforts to adopt and implement a comprehensive economic recovery program. The Executive Board will review further the matter of Zimbabwe's overdue financial obligations to the Fund within three months.