The International Monetary Fund (IMF) has said Zimbabwe can only expect a financial bailout to stabilize its troubled economy only after clearing arrears to international lenders.

Zimbabwe’s economy faces severe challenges, the IMF said, but noted it stood ready to support the southern African nation.

“The IMF stands ready to support the authorities and their efforts to address these challenges. But as we noted, in addition to a strong coherent reform program, a concerted international effort will be required to revive and reintegrate the Zimbabwean economy.

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“An IMF financial arrangement, for example, would only be possible after progress in resolving Zimbabwe’s arrears to the other International Financial Institutions (IFIs) and to the other creditors,” the IMF said.

Zimbabwe, which owes arrears of around $1.8 billion to the World Bank and the African Development Bank, has not been able to borrow from international lenders since 1999, when it started defaulting on its debt.

“There has to be an arrears clearance process and a clear strategy for clearing those arrears with other creditors and that also has to be factored in to their ability, their sustainability over time.

“Restoring growth will require concerted efforts to tackle the fiscal deficit including through rationalizing and better targeting the expense of agricultural support programs. These efforts should be complemented by structural reforms to strengthen the role of the private sector by improving the business climate and reducing policy uncertainty,” the IMF added.

Zimbabwe is desperate for fresh capital injection to turnaround an economy battered by years of economic mismanagement under former President Robert Mugabe.

Recently, President Emmerson Mnangagwa was in Davos, Switzerland where he met the towering figures in the global economy, amongst them the IMF Managing Director Christine Lagarde.-allnetafrica