Zimbabwe will use its expected US$1 billion in new Special Drawing Rights being issued by the International Monetary Fund to fund productive sectors, infrastructure health and education, Finance and Economic Development Minister Professor Mthuli Ncube has said and has barred spending on “useless consumption”.
The IMF is expected to disburse US$650 billion in SDRs to member states to help in their economic recovery from the Covid-19-induced downturns with Zimbabwe’s share being around US$1 billion.
Responding to questions during debate of the 2021 mid-term budget review, Prof Ncube said Zimbabwe had voted in favour of the SDR allocation during last week’s IMF members’ vote.
Once the money is released he would consult Parliament on how the funds would be used.
“It is promising to be a very handsome windfall but let us not waste it on useless consumption. It should go towards, I would say, production, investment, stabilising our currency and infrastructure but also not forgetting our socio-economic sector, health and education. We will still need to do more. So, I will come back here with a very clear plan Mr Speaker Sir to seek your permission on how we should make use of this US$1 billion.”
He added that the money would not be used in one year but spending be spread for a period of up to three years.
SDRs are supplementary foreign exchange reserve assets defined and maintained by the IMF. They are units of account for the IMF, and not a currency as such.
They represent a claim to currency held by IMF member countries for which they may be exchanged.
If approved by the IMF’’s board of governors, as is expected, the reserves could become available by the end of next month. – Herald