Govt calls for more capital, long-term funding
GOVERNMENT has called on the African Development Bank (AfDB) to increase its private sector window with more capital and long-term funding.
The bank's representatives met with Finance minister Mthuli Ncube on Wednesday to discuss the countries’ arrears and ongoing partnership between the Southern African nation and the development financial institution.
According to the AfDB, Ncube said the country was in need of additional bridge finance to steady interest rates .
“African Development Bank officials and representatives of the Zimbabwe government met on Wednesday to discuss the nation’s arrears clearance. They noted progress in Zimbabwe’s reform agenda,” Ncube was quoted as saying by the AfDB report.
“The government has made significant efforts ahead of embarking on a new programme, including reducing inflation.
“He asked the African Development Bank to increase its private sector window with more capital and long-term funding and said the country would need additional bridge finance to hold interest rates steady.”
The AfDB delegation that met Ncube was led by the group's vice-president Yacine Fal.
The bank revealed that Ncube outlined the ongoing reforms in the wake of global headwinds, such as drought, cyclones, the Covid-19 pandemic and more recently, fuel and fertiliser price hikes.
“The Zimbabwe government has lowered taxes on fuel, made changes to its land policy and is implementing a range of social protection measures while tackling the Covid-19 pandemic, Ncube said," the AfDB revealed.
“Two projects in particular are going well. The first is an agriculture-based programme, which has given relief to two million households, and the second is a cash transfer programme, targeting children from poor families. Other measures included subsidised medical care for elderly people and other vulnerable population groups, and a grain distribution programme for populations indrought-hit areas.”
AfDB chief economist Kevin Urama noted that Zimbabwe’s reforms toits stateowned enterprises were a demonstration of its willingness tomake progress on that front.
“The African Development Bank’s Africa Natural Resources Centre could provide additional support and technical assistance in land policy. Its public finance management academy, which provides a framework for supporting regional member countries in their public financial and debt management efforts, specifically on training, technical assistance and policy dialogue, is another important tool which the Bank has on hand to assist,” Urama said.
This comes as the International Monetary Fund has called for the country to work toward a new Staff Monitored Programme (SMP) with the Bretton Woods Institution.
SMPs are informal agreements between country national authorities and International Monetary Fund (IMF) staff to monitor the authorities’ economic programme.
The previous SMP between Zimbabwe and the IMF was aborted after the government failed to meet key targets that had been set.