IMF welcomes rich nations donor pledge

MAPUTO – The International Monetary Fund welcomed the G8 rich nations’ pledge to increase donor spending on Africa but also wants to see trade for developing countries addressed, its deputy managing director said on Tuesday.

The G8 meeting of rich nations in Scotland earlier in July pledged to more than doubt aid to Africa. Talks on farm subsidies and tariffs will be on the agenda at World Trade Organisation talks later in the year.”It is a donor initiative and if that is to be realised we would welcome it and we would also like to see the issue of trade for developing countries will be addressed in what we call the Doha round talks,” IMF Deputy Managing Director Tatatoshi Kato told a news conference.The IMF’s executive board would meet to discuss cancelling debt to owed to it by a string of countries who will receive debt relief under a scheme agreed by the G8, he said.He would not give further details.”This a decision for the IMF Executive Board so We will in concrete terms see if and when the IMF Executive Board approves the required changes,” he said in Mozambique, one of the countries to benefit most from debt relief.But he said Mozambique still faced serious problems and needed structural reforms to provide substantial and broad based growth and reduce poverty in a country that saw its economy shattered by years of civil war.”The key and immediate challenge is to arrest the recent deterioration in fiscal performance,” he said.Mozambique failed to meet its budget revenue targets in 2004.”Its necessary to raise the tax revenue to GDP ratio,” he added.”Strengthening tax administration, eliminating tax exemptions and improving compliance are all needed actions.”Mozambique should also improve its expenditure management, reduce its dependence on aid and introduce more flexible labour regulations, he said.He refused to comment on issues surrounding Zimbabwe, which southern African media has speculated might be facing expulsion from the IMF over arrears of US$306 million, saying he had been out of Washington for several days and had no details of situation.-Nampa-ReutersTalks on farm subsidies and tariffs will be on the agenda at World Trade Organisation talks later in the year.”It is a donor initiative and if that is to be realised we would welcome it and we would also like to see the issue of trade for developing countries will be addressed in what we call the Doha round talks,” IMF Deputy Managing Director Tatatoshi Kato told a news conference.The IMF’s executive board would meet to discuss cancelling debt to owed to it by a string of countries who will receive debt relief under a scheme agreed by the G8, he said.He would not give further details.”This a decision for the IMF Executive Board so We will in concrete terms see if and when the IMF Executive Board approves the required changes,” he said in Mozambique, one of the countries to benefit most from debt relief.But he said Mozambique still faced serious problems and needed structural reforms to provide substantial and broad based growth and reduce poverty in a country that saw its economy shattered by years of civil war.”The key and immediate challenge is to arrest the recent deterioration in fiscal performance,” he said.Mozambique failed to meet its budget revenue targets in 2004.”Its necessary to raise the tax revenue to GDP ratio,” he added.”Strengthening tax administration, eliminating tax exemptions and improving compliance are all needed actions.”Mozambique should also improve its expenditure management, reduce its dependence on aid and introduce more flexible labour regulations, he said.He refused to comment on issues surrounding Zimbabwe, which southern African media has speculated might be facing expulsion from the IMF over arrears of US$306 million, saying he had been out of Washington for several days and had no details of situation.-Nampa-Reuters