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Govt to draw US$145m IMF funds

Some US$145 million from the US$960 million Special Drawing Rights released by the International Monetary Fund last year to cushion member States against the effects of the Covid-19 pandemic will be drawn down by Government this year with social services and the productive sectors getting the bulk of the money.

Finance and Economic Development Minister Professor Mthuli Ncube gave the details when he appeared before the Parliament’s Portfolio Committee on Budget, Finance and Economic Development. The Special Drawing Rights are an international reserve asset created by the IMF in 1969 to supplement other reserve assets of member countries and can be converted into a basket of international currencies comprising the US dollar, Japanese yen, euro, pound sterling and Chinese renminbi.

“For 2022 we have US$145 million which will target social services, agriculture, industry and infrastructure development,” said Prof Ncube.

Health will get US$25 million and education US$10 million, while a US$30 million revolving fund for the agricultural sector would be established with this facility targeting the horticultural sector as part of efforts to revive exports.

A further US$20 million will go towards revival of small-holder irrigation schemes across the country.

Another US$30 million revolving fund will be established for industry retooling. mainly for the cotton and garment manufacturing sectors.

So far six banks have signed up to take part in the disbursement of funds under the revolving facilities and these are NMB, AFC, FBC, Nedbank, Ecobank and CBZ.

Professor Ncube said Government would act as guarantor of the facilities through the funds drawn down from the SDRs with US$200 million would be disbursed under the revolving facilities basing on the utilisation of the funds set aside for this year.

“We want to make sure that this facility works before we commit huge resources,” he said.

Government has also set aside US$20 for infrastructure development and establishment of three more gold centres for small scale mines.

The first gold centre was established in Bubi as part of Government’s efforts to empower small scale gold producers through provision of an assortment of services such as the hiring of equipment at affordable rates, technical support services, processing and buying of minerals produced by small sale miners at fair prices.

Prof Ncube also told the committee that Government had set aside US$70 million to go towards the country’s strategic reserves.

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