HARARE, – The International Monetary Fund (IMF) says the softening of the Indigenization and Economic Empowerment Act is a step in the right direction and feels the 2018 budget is a good starting point in addressing excessive government expenditure.

The 2018 budget which was presented last week by Zmbabwe’s Finance minister Patrick Chinamasa, is seen as tackling the widening fiscal deficit and implementing critical structural reforms.

The controversial local ownership law, which requires foreign owned companies to cede 51 percent to black Zimbabweans, was amended to apply only to the Platinum and Diamond sectors.

IMF spokesperson William Murray on Thursday said a mission had concluded its assessment of the country’s fiscal position.

“Our understanding as a result of this mission but also in our ongoing context is that the authorities are cognisant of the challenges facing Zimbabwe and have expressed their determination to address them,” said Murray.

“They presented their 2018 budget on December 7th and that budget stresses that the government’s intention to re-impose budget discipline, reform and open the economy and engage with the broader international community.”

Murray added that the IMF stands ready to support the southern African nation but stressed that Zimbabwe would have to pay up its arrears to multilateral lenders before it could receive any new financial support.

“In addition to a strong and coherent reform program, a concerted international effort will be required to revive and reintegrate the Zimbabwe economy,” he said.

“An IMF financial arrangement, for example, would only be possible, after progress is made in resolving Zimbabwe’s arrears to other international financial institutions and other creditors.” – Source