On June 27, 2014, Management of the International Monetary Fund (IMF) completed the combined first and second reviews under the Staff-Monitored Program (SMP) with Zimbabwe.1 An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic program.2 The SMP represents Zimbabwe’s first IMF agreement in more than a decade.
The Zimbabwean authorities’ performance under the SMP has been broadly satisfactory and the authorities have taken corrective measures to ensure a track record of policy implementation going forward. The SMP provided a useful anchor for Zimbabwe in a difficult election year. However, progress in implementing the program was slowed by a long electoral process and a protracted post-election transition, as well as an adverse external environment. Thus, a number of quantitative targets and structural benchmarks were not met.
The authorities have began implementing policy measures aimed at addressing the 2014 fiscal gap, improving the quality of public expenditures, enhancing financial sector stability, and moving forward delayed structural reform measures. The authorities have reiterated their continued commitment to the policies under the SMP and to enhanced engagement with their creditors and the international community. A successful conclusion of the third review could pave the way to a successor SMP, which the authorities have indicated they may request, to build on their achievements and support a stronger policy framework.
IMF staff will remain engaged with the authorities to monitor progress in the implementation of the authorities’ economic program, and will continue providing targeted technical assistance to support Zimbabwe’s capacity-building efforts and its adjustment and reform program.
1 A staff-monitored program is an informal and flexible instrument for dialogue between the Fund staff and a member country on its economic policies. It is not accompanied by financial support.