Treasury outlines SDRs spending specifics Prof Mthuli Ncube

Prosper Ndlovu, Business Editor
GOVERNMENT has unveiled the expenditure details of the US$958 million secured from the International Monetary Fund (IMF) under its Special Drawing Rights (SDRs) scheme, which will be allocated over a period of three years.

The utilisation of the resources will be done in transparent and accountable manner, said Finance and Economic Development Minister, Professor Mthuli Ncube.

Under the general allocation of SDR456 billion, (equivalent to about US$650 billion), Zimbabwe was in August this year allocated SDR677,4 million, which is equivalent to US$958 million by the IMF.

The multilateral financier has said the injection of the SDRs was aimed at helping the global economy cope with the major setback induced by the Covid-19 pandemic and the need to build reserves.

The allocations are made according to each country’s shareholding in the IMF.

Presenting his 2022 National Budget statement in Parliament on Thursday, Prof Ncube, said the SDRs would help address the long-term global need for reserves, build confidence, foster resilience and stability and enable Zimbabwe to cope with the impact of Covid-19.

“In Zimbabwe’s context, the funds will be used prudently, with accountability and transparency to support projects in the social sectors namely health, education, and the vulnerable groups, productive sector value chains, infrastructure investment and foreign currency reserves and contingency fund,” he stated.

“These SDRs will be utilised over a period of three years, with an amount of US$311 million expected to be disbursed towards the following social programmes — procurement of Covid-19 vaccines (US$71 million), vaccine roll-out programme (US$6 million), procurement of Covid-19 related medical and testing equipment (US$10 million), support for agriculture productive social protection scheme for rural and peri-urban households (US$80 million); and support to the road development program covering — Harare-Beitbridge Road, Masvingo Road Interchange Development Project (Mbudzi) and the Emergency Road Rehabilitation Program (US$144 million).”

Moving into 2022, Prof Ncube said expected SDR disbursements of US$145 million will be channeled towards key focus areas. These include; investments in social sectors (health-US$35m), education (US$10m), agriculture support (export revolving fund for agriculture (US$30m), cash guarantee to banks and small-holder farmer irrigation schemes (US$20m).

Focus would also be given to industry support covering retooling/revolving fund for new equipment and replacement for the value chains and cash guarantee to banks. Infrastructure development is also under focus with housing development set to receive US$10m and gold centres US$10m.

Meanwhile, the minister has paid tribute to development partner support, which continues to play a pivotal role in supporting Government’s efforts towards the implementation of development programmes and projects across various priority sectors.

He revealed that during the period January to September 2021, Zimbabwe received development assistance amounting to US$647.8 million, of which US$401.9 million was from bilateral partners and US$245.9 million from multilateral partners.

“A further US$202.4 million in development assistance is projected during the fourth quarter of 2021, giving cumulative receipts of US$850.2 million for the year,” said Prof Ncube.

In 2022, he said support from the development partners was projected at US$761.5 million, broken down as, US$274.3 million and US$487.2 million from multilateral and bilateral partners, respectively.

“Government also acknowledges support received from the People’s Republic of China towards the construction of Parliament building and Pharmaceutical Warehouse, drilling of 500 boreholes, Covid-19 vaccines as well as rehabilitation of infrastructure destroyed by Cyclone Idai,” said Prof Ncube.

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