JOHANNESBURG (Reuters) – Zimbabwe’s economic growth is threatened by high government spending, an untenable foreign exchange regime and inadequate reforms, a senior International Monetary Fund (IMF) official said.

Zimbabwe was once one of Africa’s most promising economies but suffered decades of decline as former President Robert Mugabe pursued policies that included the violent seizure of white-owned commercial farms and money-printing that led to hyperinflation.

Mugabe, 93, resigned on Tuesday after nearly four decades in power 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.

Zimbabwe has not been able to borrow from international lenders since 1999 when it started defaulting on its debt, and has $1.75 billion rand in foreign arrears.

“The economic situation in Zimbabwe remains very difficult,” Gene Leon, IMF’s mission chief for Zimbabwe said in a statement to Reuters late on Wednesday.

“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.”

Leon said Zimbabwe should resolve arrears to the World Bank, African Development Bank and the European Investment Bank, among other reforms, for the IMF to consider future financing request from the country.

Zimbabwe should also be ready to implement strong macroeconomic policies and structural reforms to restore fiscal and debt sustainability, Leon said.

(Reporting by David Lawder in Washington and Olivia Kumwenda-Mtambo in Johannesburg; Editing by James Macharia)