Zimbabwe's economic woes

Once one of Africa's most promising economies, Zimbabwe was now in a "very difficult" economic situation, Gene Leon, the IMF's mission chief to the country, warned late on Wednesday.

In a statement to the news agency Reuters, Leon said Zimbabwe must be ready to implement strong macroeconomic policies and structural reforms to restore fiscal and debt sustainability.

"Immediate action is critical to reduce the deficit to a sustainable level, accelerate structural reforms, and re-engage with the international community to access much needed financial support," he added.

Nearly four decades under the rule of former President Robert Mugabe have turned Zimbabwe's once well-diversified economy into the region's basket case. Per capita incomes are down by 15 percent compared with 1980 and the country's foreign debt has piled up to $1.75 billion (€1.48 billion).

Mugabe's policies, which included the violent seizure of white-owned commercial farms and money-printing to meet government expenditure, have led to hyperinflation, forcing the government to abandon its currency in favor of the US dollar as the principal means of exchange.

Mugabe, 93, resigned on Tuesday following pressure from the military, the ruling ZANU-PF party and the general population. New ZANU-PF leader Emmerson Mnangagwa is expected to be sworn in as Zimbabwe's president on Friday.

Read more: Zimbabwe's Emmerson Mnangagwa returns — What's next?

Zimbabwe has not been able to borrow from international lenders since 1999 when it started defaulting on its debt. Therefore, the IMF mission chief called on the new Zimbabwean leadership to resolve arrears to the World Bank, the African Development Bank and the European Investment Bank, in order for the IMF to consider future financing request from the country.

uhe/tr (Reuters)