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Zimbabwe’s economic reform agenda off-track: IMF

JOHANNESBURG (Reuters) – The International Monetary Fund (IMF) said on Wednesday that Zimbabwe’s economic reform agenda was off-track, and that without further donor support the risks of a deep humanitarian crisis were high.

Zimbabwe is struggling through its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicine, fuel and electricity worsening. Hopes of a quick recovery under President Emmerson Mnangagwa are fading.

“The government that came to office following the 2018 elections adopted an agenda focused on macro stabilization and reforms … but [this] is now off-track as policy implementation has been mixed,” the IMF said in a statement outlining the conclusion of its latest Article IV consultation with Zimbabwe.

It added that delays and missteps in foreign exchange and monetary reforms had failed to restore confidence in Zimbabwe’s new currency and the government’s reengagement internationally on debt arrears was still delayed, constraining its access to external support.

Last June Zimbabwe ended a decade of dollarisation, fuelling inflation which economists estimate reached 525% in December.

Without an increase in donor support, the IMF said, Zimbabwe had a high risk of humanitarian crisis, with more than half of the population without food security, another poor harvest expected and growth in 2020 projected at near zero.

Zimbabwe also has a severe drought that has severely hit supplies of staple grains such as maize and further pushed their price up. The worsening poverty is upsetting the fragile calm experienced since the 2017 coup that toppled long-time ruler Robert Mugabe.

(Reporting by Emma Rumney; Editing by Grant McCool)

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