Kudakwashe Mugari and Africa Moyo
The African Development Bank (AfDB) has pledged US$30 million to Zimbabwe, which will be channelled towards cushioning vulnerable citizens following a poor harvest last season.
This comes as international financial institutions concurred that Harare needed financial support for social protection in the face of the myriad challenges that affected the country, including Cyclone Idai and erratic rains in most parts of the country resulting in low agricultural output.
Finance and Economic Development Minister Professor Mthuli Ncube, who was in the United States recently for the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, said there is consensus that Zimbabwe required financial support to overcome the social challenges it was facing.
“I was in (Washington) DC to participate in the Annual Meetings of the IMF and World Bank, and have discussions on the Staff Monitored Programme (SMP) with the IMF,” he said.
“I also presented at a ‘Zimbabwe Roundtable’ hosted at the World Bank, on ‘progress on policy reforms’ and the impact of the drought induced by El Niño and impact of Cyclone Idai.
“The partners concurred that Zimbabwe needs financial support in order to cushion vulnerable citizens and for social protection. At the Roundtable, the African Development Bank pledged US$30 million to Zimbabwe to cushion the vulnerable.”
Latest reports indicate that almost 2,2 million people — both in urban and rural areas — require food aid.
Government has begun food imports, with 100 000 tonnes of maize on its way from Tanzania.
President Mnangagwa has repeatedly said Government will work around the clock to ensure no one died of hunger despite last season’s poor harvest.
During his time in Washington DC, Prof Ncube participated as a panellist in a session organised by the IMF for countries and economies in transition.
He took the opportunity to outline Zimbabwe’s progress in policy reforms aimed at ensuring that Zimbabwe becomes an upper middle income economy by 2030.
Prof Ncube said he also met with various investors who are keen to invest in Zimbabwe.
Meanwhile, Prof Ncube said the illegal sanctions imposed on Zimbabwe mainly by the United States, have made it difficult for the country to access credit lines from the major international financial institutions.
He said negotiations at top-level platforms will continue so that the sanctions were removed to allow the country to access financial support.
The removal of sanctions will see international investors flocking to Zimbabwe to do business as over 50 percent of risk associated with the country at the moment would have been eliminated.
Said Prof Ncube: “Some of the companies under sanctions include ZMDC (the Zimbabwe Mining Development Corporation) and CBZ.
“Sanctions have had a negative impact on the economy. Our banks have lost critical credit lines with their international counterparts, thus depriving the private sector of foreign credit and trade finance.
“Some companies have faced difficulties in making international payments. Some of the companies have had to pay fines, which has impacted their financial standing.”
Prof Ncube said the only way Zimbabwe’s economy can be back on its feet was through access to financial support.
Zimbabweans has secured the support of SADC and African Union in the fight against sanctions.
Prof Ncube told journalists in Harare last Friday that sanctions were bleeding the economy.
“All I can say is that they are hurtful to us. Credit lines are not available for Zimbabwe’s banks from their counterparts globally,” he said.
The economy is battling to attract investors due the dark cloud associated with dealing with countries under sanctions, while companies are struggling to retool and create new jobs.
The US Embassy in Harare, which has been castigated by political commentators for acting like a local opposition party, continues to mislead the nation and the world on the impact of sanctions on the economy despite 56 companies being blacklisted.
Sanctioned firms are struggling to obtain financial support and are barred from sourcing spares and raw materials from the West.
The US Embassy has not bothered to explain why the punitive sanctions regime remains in force if it was not hurtful as repeatedly pointed out by companies and Government.
In a show of intransigence, the US added Security Minister Owen Ncube on to the sanctions list on Friday, when the entire regional bloc was demanding the immediate removal of sanctions, which have caused untold suffering in all sectors of the economy.
Recently, the immediate past African Union chairman and Rwandan President Paul Kagame took the anti-sanctions fight to the West and told leaders of the world’s most powerful nations during the Group of Seven (G7) summit in France that sanctions on Zimbabwe must be removed.
The G7 is made up of the US, the United Kingdom, France, Italy, Germany, Japan and Canada.