For the first time in a decade, the International Monetary Fund is making loans available to Zimbabwe. The vast sum of $500 million will be used to replenish the country’s declining foreign currency reserves and to help lift the country out of a long and deep economic crisis.
It is the biggest financial boost Zimbabwe has received since the formation of the unity government, led by President Robert Mugabe and Prime Minister Morgan Tsvangirai, in February.
Zimbabwe is in dire need of financial aid to help restore its devastated economy. It is hoped that the Zimbabwean dollar will be restored, but for now the US dollar remains the official currency.
The money will only be released on condition that Zimbabwe’s finance minister ensures it is not diverted to other projects. The Southern African country last received financial assistance from the IMF in 1999 when it approved a standby facility of US$193 millions of which only US$24 million was distributed. The institution never gave Zimbabwe the remaining balance as it was not happy with some of the government’s policies.
The Zimbabwean government projects that its economy will grow by 3.7 percent this year.