IMF Warns Zimbabwe Over Trafigura-Partner Payouts, FT Says

(Bloomberg) -- The International Monetary Fund told the Zimbabwean government that state payouts to a partner of Trafigura Group Ltd. undermined the country’s newly introduced currency, the Financial Times reported.

Payments to Sakunda Holdings in July for a state farm-subsidy program championed by President Emmerson Mnangagwa were effectively made by the central bank printing money, the London-based newspaper reported, citing people it didn’t identify. The disbursements led to an 80% surge in the amount of money in circulation, compared with an IMF-set target of 8% to 10%, it said.

The IMF warning led regulators to last week freeze Sakunda’s bank accounts and temporarily halted a decline in the Zimbabwean dollar, the FT said. Sakunda is headed by Kudakwashe Tagwirei, who is close to Zimbabwe’s ruling party, and the company owns a stake in a joint venture with Trafigura Zimbabwe, it said.

“Trafigura Zimbabwe is only involved with petroleum distribution and has no involvement with the activities of Sakunda Holdings in Zimbabwe,” Trafigura, which owns 49% of Sakunda’s fuel business, said in an emailed response to questions.

Zimbabwe’s central bank didn’t immediately respond to a request for comment sent by Bloomberg via email. Calls to Sakunda’s office in Harare weren’t answered. The IMF’s office Harare declined to comment.

Zimbabwe’s dollar, a precursor of which was pegged to the U.S. dollar at parity as recently as February, has weakened almost 60% since it was officially reintroduced as the nation’s currency in June.

To contact the reporters on this story: Ray Ndlovu in Johannesburg at rndlovu1@bloomberg.net;Michael Sin in Hong Kong at msin12@bloomberg.net

To contact the editors responsible for this story: Gordon Bell at gbell16@bloomberg.net, ;Niluksi Koswanage at nkoswanage@bloomberg.net, Paul Richardson, Alastair Reed

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