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Harare – The Zimbabwean government has entered into a second Staff Monitoring Programme (SMP) with the International Monetary Fund (IMF), marking another critical step in the country’s efforts to stabilize its struggling economy.
This marks the second such agreement since President Emmerson Mnangagwa’s administration took office following the July 2018 elections. An SMP, as defined by the IMF, is “an informal agreement between an IMF member country and IMF staff to monitor the member country’s economic programme.”
It is typically designed for nations that are “not yet able to implement a full IMF-supported programme, often due to domestic instability or lack of financing assurances.”
A Test of Fiscal Discipline
Under the nine-month monitoring framework, the IMF will closely assess Zimbabwe’s management of public finances. Economic analysts view this as both a warning signal and a critical test for the government’s ability to implement reforms.
“This should be seen as a red flag regarding the state of the economy and a concerning indicator for potential investors,” said one Harare-based economist.
Wojciech Maliszewski, the IMF mission chief for Zimbabwe, confirmed the engagement, stating:
“I’m here for the Staff Monitoring Programme… We are making good progress in agreeing on policies that could enhance the stability of the domestic currency.”
ZiG Under Scrutiny
The programme comes at a time when Zimbabwe’s new gold-backed currency, the ZiG (Zimbabwe Gold), has faced significant challenges.
The currency depreciated by 2.86% in May, and according to The NewsHawks, it is currently “the world’s second-worst performing currency.”
The IMF has expressed its preference for the ZiG to become Zimbabwe’s sole legal tender.
A recent Bloomberg report noted that the Fund “would like to see the ZiG become a fully national currency,” phasing out the multi-currency system that has long dominated the economy.
Public Skepticism and Government Assurance
The move has sparked debate among citizens, with some questioning whether the SMP is a disaster management measure or a genuine reform programme. Finance Minister Mthuli Ncube, however, defended the government’s approach, emphasizing:
“Fiscal discipline is essential to prevent runaway expenditure. This engagement is about ensuring sustainable economic policies.”
As the IMF team continues its assessment in Zimbabwe, the nation watches closely, awaiting signs of whether this latest intervention will lead to meaningful recovery or merely prolong an economic stalemate.
Additional reporting by IMF sources and Bloomberg
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