The government has assured transparency and accountability in its spending of the US$961 Million allocation under the International Monetary Fund (IMF)’s Special Drawing Rights (SDRs) amid widespread concerns over misappropriation of public funds.
SDR are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF).
SDR are used by the IMF to make emergency loans and are mostly used by developing countries to up their currency reserves without the need to borrow at high interest rates.
The US$ 961 million to Zimbabwe is part of IMF’s latest US$ 650 billion SDRs allocation earmarked to provide additional liquidity to the global financial system following the negative impact of the COVID-19 on the global economy.
“We would like to advise the public that Zimbabwe has received SDR 677.4 million (USD961 million) from the International Monetary Fund (IMF) under the IMF’s USD650 Billion SDR allocation earmarked to provide additional liquidity to the global financial system. The funds were deposited in the Reserve Bank of Zimbabwe account with the IMF for value 23 August 2021,” read a joint statement by the Finance Minister, Professor Mthuli Ncube and Reserve Bank of Zimbabwe governor, Dr John Mangudya.
“The immediate impact of this support from the IMF is to increase the foreign exchange reserves position of the country by US$ 961 million. This will go a long way in buttressing the stability of our domestic currency,” read the statement.
Lately, the Zimbabwe dollar has been losing ground on the parallel market, with the gap against the official rate widening owing to the failure by the Foreign Currency Auction Market System to sustain demand for foreign currency.
Since the IMF Executive board backed the SDR distribution early this month, there have been growing calls in various quarters locally, for government to be transparent and prudent in its allocation of the funds to various strategic sectors.
“The funds will be used prudently, with utmost accountability, to support the social sectors namely, health, education and the vulnerable groups, productive sectors that include industry, agriculture and mining, infrastructure investment covering roads and housing and foreign currency reserves and contingency fund, to support our domestic currency and macro-economic stability,” said the government.
Faced by a financially straining COVID-19 pandemic, Zimbabwe is already in need of funds for the procurement of vaccines to achieve herd immunity.
But with a tainted pedigree of misappropriating public funds and misplacing priorities in spending there are concerns for a more transparent, sustainable and social driven use of the funds.
“The amount will indeed go a long way in furthering economic development if used wisely and transparently. We also take heart that there will be an allocation towards the health sector, hoping that besides procuring vaccines, some funds will be channeled towards staff remuneration for all their sacrifices in the fight against COVID-19,” said Vendors Initiative for Social and Economic Transformation, a local pressure group.
Last year, government awarded a multi- million dollar contract for COVID-19 testing kits, drugs and personal protective equipment to a shadowy company at inflated prices, marking a classic case of public funds misappropriation.
