imf-logo.jpgCredibility of the global lender, the International Monetary Fund (IMF), has of late come under close scrutiny as confidence in the institution continues to decline.

 

Local economic analysts have questioned the relevance of the recommendations by the IMF team which was recently in the country.

ZBC News Business reporter, Luckmore Safuli, explores the shortcomings of the IMF and how best Zimbabwe can handle advice from the Brettonwoods institution.

Formed in 1946 with the mandate to offer technical advice and financial support to European countries soon after the Second World War, the International Monetary Fund has ceased to effectively execute its economic role and has instead become a political organisation controlled by powerful nations at the detriment of emerging economies.

The IMF team which was recently in the country for its Article IV consultations concluded that Zimbabwe’s economy growth is set to decelerate from the projected 9.3 % to 5.5 % owing to indigenisation drive and vulnerabilities in the financial services sector.

Economic analysts, Mr. Willie Ganda who described the IMF’s recommendations as misplaced and pessimistic, noted that the institution’s policies must be taken with a pinch of salt.

“It has increasingly become difficult to take seriously any advice from the IMF,” said Mr. Ganda.

Economic commentator, Dr. Lovemore Matipira believes the global lender’s pessimistic outlook does not reflect the true developments on the ground as the country’s economy is picking up as evidenced by positive growth rates in the mining and agriculture sectors.

“I think the IMF assessment is not a fair one, we have seen positive developments in quite a number sectors, notably the agriculture and mining sector,” Dr. Matipira said.

Observers and economic analysts have criticised the IMF’s double standards and strait jacket policies which have failed to yield results, especially on the African continent.

jonathan kadzura2 18.08.10.jpgEconomic analyst, Mr. Jonathan Kadzura who castigated the reliance on IMF for advice emphasized the need for home grown solutions given the country’s strong human capital base.

“Zimbabwe today needs homegrown solutions to whatever challenges we face as a country….the IMF’s advice has never worked anywhere in Africa…so let’s forget about it,” said Mr. Kadzura.

While some local policy makers are ready to jump and seize any economic food baked in the IMF kitchen, Zimbabweans should know better as the Economic Structural Adjustment Programme (ESAP) prescribed for the country in the early 1990s turned to be total disaster.

 

Of note is that those SAPs have never worked anywhere in the 3rd World. On the contrary, the world’s fastest growing economy (China) achieved the feat without the IMF’s help.

The IMF which is still haunted by the former boss Strauss Kahn’s scandal has also failed to effectively deal with the Eurozone debt crisis which has seen countries like Greece failing to recover from the debt trap.

Observers believe the institution requires reformation in order for it to regain its credibility as a global financier and economic advisor.