Zimbabwe receives $1bn from IMF

24 Aug 2021

Zimbabwe is set to receive around $1 billion from the International Monetary Fund within its allocation of Special Drawing Rights (SDRs).

Part of the funding will go towards manufacturing health, education, agriculture and mining.

IMF member nations started to receive their shares of the special issue SDRs totalling around US$650 billion on Monday, aiming to help the global economy recover from the pandemic. The SDR is distributed according to each nation’s shareholding in the IMF.

With economic growth in Zimbabwe forecast to hit 7.8% in 2021, the SDR allocation will likely play a crucial role. According to Finance and Economic Development Minister Professor Mthuli Ncube, the SDRs should "be in our account by tomorrow".

"We have about US$1 billion. The idea is that the SDRs will be channelled towards areas that have been affected by Covid-19," said Professor Ncube.

"So we will invest the SDRs in the health, agriculture, education, roads, industry and manufacturing, mining sectors, and supporting the vulnerable.

"In terms of the health sector, we will channel the SDRs towards procuring more Covid-19 vaccines. We will also invest in hospital infrastructure especially at our large referral central hospitals, and the equipment for the hospitals."

Professor Ncube said the IMF's declaration that Zimbabwe will have access to deploy close to US$1 billion in SDRs, "is just the booster this economy needs This move is a truly encouraging vote of confidence from the international community in the new Zimbabwe, its reforms, and its positive direction." 

He went on to say: "It is of the utmost importance that these funds provide a return; the SDRs must grow, and as they grow, they drive the economy in the process. There are three sub-sectors within Zimbabwe's productive sector which require urgent investment and upgrading: agriculture, industry and manufacturing, and mining. Zimbabwe's agriculture is historically the backbone of our economy. For many it is all they know. So, we must invest in efficiency, technology, and improving yields.

"We need to stretch the use of the SDRs. We need to support macro-economic stability. Setting aside resources to buttress the currency can ensure that the downward trend in inflation is maintained," the professor added.