Govt to ease power, cash challenges…$8,5bn set aside for electricity…$500m more cash in 6 months

Spread the love

Government has set aside $8,5 billion to support electricity generation and imports this year as part of efforts to ease load-shedding.

This was said by Finance and Economic Development Minister Professor Mthuli Ncube yesterday while announcing the Government’s key plans for the year.

Some of the money, he said, will be channelled towards power imports, mainly from South Africa and Mozambique.

“Availability of power is expected to increase as more independent power producers (IPPs) come on line,” said Prof Ncube.

The Government also plans to give incentives to companies that decide to go off grid and install solar.

Many companies are now using solar power for their operations on the back of erratic supplies from Zesa.

Yesterday, the Zimbabwe Energy Regulatory Authority (Zera) announced that it had received applications from RioZim Limited to construct, own, operate and maintain a 68,4MW solar plant at Murowa Diamond Mine in Mazvihwa Communal Lands, Zvishavane District.

RioZim intends to set up another 38,04MW solar plant at Renco Mine in Nyajena Communal Lands, Masvingo Province, and two 54MW solar plants at Cam & Motor Mine; and Dalny Mine, both in Kadoma, Mashonaland West Province.

To address cash challenges, Prof Ncube said a further $500 million will be injected into the economy within the first half of this year.

Cash shortages have forced some people to rely on traders who charge premiums of up to 40 percent.

Prof Ncube said it was the Government’s desire this year, to ensure stability of the local currency, maintain low prices on basic goods and services, create jobs for young people and improve household food security.

He conceded that 2019 was difficult and characterised by increases in the cost of fuel, basic commodities and electricity.

The price increases did not match salary increments, throwing most workers below the poverty datum line.

Said Prof Ncube: “An additional $500 million in notes and coins will be put into the economy in the first six months of 2020. We expect this to ease the demand for physical cash and you won’t be ripped off by money dealers who sell cash.”

Mobile money agents and those connected to people who have access to money, sell cash at premiums of between 30 percent and 40 percent.

The Reserve Bank of Zimbabwe (RBZ) introduced new $5 and $2 notes and $2 coins to ease shortages of physical cash, but accessing the money in banks remains a challenge.

Reports abound that some bank workers were diverting cash to street dealers.

But as more cash is pumped into circulation, Prof Ncube said maintaining the value of the Zimbabwe dollar’s exchange rate was important to ensure price stability.

He said central Government was living within its means and had put in place deliverables to stimulate production and exports.

Increased production is among the Government’s primary targets this year, to generate more foreign currency, ensure product availability and create jobs.

Prof Ncube said youth employment also tops Government priorities, hence the establishment of the $500 Youth Employment Tax Incentive (YETI) to support employers who generate jobs for youths.

Any additional job created will attract a percentage tax credit to the employer.

YETI is designed to reduce the cost of hiring young people through a cost-sharing mechanism with the Government.

To increase economic opportunities and participation by youths in national development, the National Venture Capital Fund has been created and will be capitalised in both local and foreign currency to finance start-up projects for the youth.

Preference will be given to targeted areas in the context of the Local Content Strategy.

Turning to food security, Prof Ncube said no Zimbabwean should go hungry, as imports of maize, wheat and soya beans will be stepped up.

This year, the Second Republic intends to embark on massive infrastructure projects targeting schools and roads, among others, in the drive to achieving Vision 2030 which targets  attainment of an upper middle income economy.

In line with President Mnangagwa’s aspirations, Prof Ncube said Zimbabwe was destined for prosperity.