Zimbabwe recently received close to US$960 million from the International Monetary Fund, as part of a global allocation by the lender. Here is how Finance Minister Mthuli Ncube plans to spend it.
Ncube will use US$280 million from the IMF SDR allocation to help shore up the currency.
This is less than what he had initially indicated. In August, he had told Bloomberg that he was considering sending half of the money into reserves. “For the support of the currency we want to hold back about $500 million,” he said.
From the IMF money, Ncube is putting aside US$222 million as his “just in case” money, budgeting for contingencies.
Of the US$960 million, Ncube will use US$122 million for healthcare. Most of the money, US$77 million, is going to the COVID-19 vaccination programme. Government will spend US$10 million on COVID-19 testing equipment. A total of US$45 million will be used for other health infrastructure and equipment.
He is also using US$10 million to build schools. Ncube is also spending US$80 million on an “agriculture productive sector social protections scheme”, a reference to the Pfumvudza and livestock programmes.
Ncube is spending US$30 million to finance a new revolving fund for horticulture. This had already been announced by Cabinet last week. The facility is jointly run by growers, banks and government.
Some US$10 million will go into smallholder irrigation schemes. Previously, government announced a plan to increase the area under irrigation from 242 000 hectares to at least 350 000 hectares by 2025. Currently, there are14 000 hectares of communal irrigation schemes being refurbished.
A total of US$30 million will go towards what Mthuli says is a revolving fund to help industries retool. He is targeting the cotton, leather, agroprocessing and pharmaceuticals sectors.
A total of US$144 million is being spent on transport infrastructure. This includes the Harare-Beitbridge highway, the ongoing road rehab programme, and the Mbudzi interchange. The Mbudzi project was in October awarded to a consortium of Fossil, Masimba Holdings and Tensor. The project was reported at US$85 million, but it is unclear whether the IMF money will be used to cover that in full or just partly.
Other infrastructure money is a US$10 million budget for housing.