Zimbabwe's external debt level 'precarious': IMF

A Zimbabwean man sits in his store, a clothing shop in Zimbabwe's capital, Harare on December 24, 2008 (AFP Photo/Desmond Kwande)
A Zimbabwean man sits in his store, a clothing shop in Zimbabwe's capital, Harare on December 24, 2008 (AFP Photo/Desmond Kwande)

Harare (AFP) - The International Monetary Fund on Monday warned Zimbabwe's economy remains fragile with a "precarious" level of external debt that needs to be addressed.

"Zimbabwe's fragile economic situation characterised by a growth slowdown, a large external deficit, and low international reserves," the IMF said.

"Zimbabwe's external position remains precarious, with usable international reserves covering less than two weeks of imports," the Fund said in a regular "Article IV" report on the state of the economy.

It urged Harare to clear its over $10 billion debt, to "avoid selective debt service" and improve the business environment.

The IMF resumed its programme with Zimbabwe last year, shortly before crunch polls extended President Robert Mugabe's 30-plus-year rule.

Zimbabwe was stripped of its voting rights by the IMF in 2003 and nearly got expelled, a rare move for the Washington-based institution.

But in 2012, the IMF relaxed its restrictions on providing consulting support to Zimbabwe as the country moved toward constitutional reforms and showed improvement in economic policy cooperation with the Fund.

Zimbabwe mid-last year owed the IMF $125.3 million in loan and interest payments.

Mugabe's indigenisation policies -- which require local majority ownership of companies -- has scared off much needed foreign investment.

High unemployment and power and water cuts have also taken their toll.imbab