An IMF team which had been visiting Zimbabwe for nearly three weeks until Thursday, also blamed Zimbabwe's grave food security situation on the chaotic land reforms.
In a statement received by AFP Friday, the IMF said while some foreign donors poured in large amounts of humanitarian aid, "other donor assistance has been curtailed because of concerns over governance".
"Pervasive price controls and other policies such as the GMB (Grain Marketing Board) monopoly contributed to shortages, damaged business confidence, drove up prices," said the IMF.
Nearly two thirds of Zimbabwe's 11.6 million people face hunger which the government has blamed solely on bad weather.
Price and foreign exchange controls which were further intensified in November last year "further damaged" production and created new shortages, the IMF said.
Zimbabwe is going through its worst economic crisis in two decades. The economy, according to the IMF, has deteriorated sharply, especially in the past four years.
"Real GDP has declined by about 30 percent and is still contracting," it said.
Inflation stood at 208 percent last month and "could well rise further".
"There are widespread shortages. Poverty and unemployment have risen, and the HIV/AIDS pandemic is worsening," said the Bretton Woods institution.
Apart from food shortages, Zimbabwe has experienced an acute shortage of foreign exchange which has led to a scarcity of all other commodities and services that are imported.
The government last week devalued its currency from 55 Zimbabwe dollars to one US dollar, to 824 to one for most transactions, a move described by IMF as "a courageous step forward" but which "will require careful follow-up".
The IMF said it has observed that there has been a "modest tightening of monetary policy in recent weeks, and that if pursued with increasing vigour, inflation will eventually be brought under control".
Because of the foreign currency shortages, Zimbabwe has fallen into arrears in its loan repayments to the IMF in recent years.
Zimbabwe incurred arrears to the IMF in mid-February 2001, and was seven months later declared ineligible to use IMF resources.
It was then removed from the list of countries eligible to borrow resources under the Poverty Reduction and Growth Facility.
The visiting team of experts welcomed the southern African country's renewed undertaking to make small quarterly payments of 1.5 million US dollars to the IMF on its 282.4 million dollar loan as of January 31 - Sapa-AFP
EMAIL THIS ARTICLE SAVE THIS ARTICLE FEEDBACK
To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
