HARARE – Zimbabwe and the African Development Bank (AfDB) are expected to sign a two-year $110 million facility today.
This comes as the country has had to rely on developmental partners and multi-lateral institutions for financial support on capital projects.
Finance minister Patrick Chinamasa, in his recently presented $4,1 billion 2015 national budget, said out of the funds, $3,32 billion or 81 percent would go towards recurrent expenditure, particularly employment costs, thus crowding out capital expenditure.
He acknowledged that the economy is under pressure and called for various reforms aimed at stimulating production in various economic sectors.
Recently, the Treasury boss said Zimbabwe expects to receive $416 million from bilateral partners and multi-lateral institutions by year end.
He said the funds would be channelled towards bankrolling various economic activities outside the national budget framework.
Zimbabwe has so far received $370,6 million from bilateral partners and multilateral institutions in the first half of 2014.
“Of the January to June 2014 disbursements, bilateral partners contributed $244,3m, whilst multilateral institutions contributed $126,3m,” said Chinamasa in his mid-term fiscal policy review in September this year.
The health sector took up 49 percent of the total amount disbursed, reaching $181,5m followed by multi-sector support of $45,3m while agriculture was allocated $40,9m.
Water and sanitation’s financial support reached $26,9m, governance $20,9m, humanitarian assistance $14,9m and business support $8,2m among other various initiatives.
Of the total financial support advanced to Zimbabwe, the United Kingdom topped the list by chipping in with $76,9m while the United States has so far advanced $58,2m.
Sweden has put in $16,3m, China $13,7m, Denmark $10,4m while the European Union provided $28,1m.
Of the support rendered by multilateral institutions, Global Fund provided a huge chunk to the tune of $101,9m towards strengthening the country’s health systems as well as mitigating effects of HIV/Aids, tuberculosis, and malaria.
“The current arrangement is that all support from the Global Fund is channelled through the UNDP,” said Chinamasa.
He also said in May this year, the World Bank approved the establishment of a Country Programmatic Multi-Donor Trust Fund to be known as the Zimbabwe Reconstruction Fund (Zimref).
“The Fund has received pledges from cooperating partners estimated at $44m, and the envelope is expected to grow over time, as results are demonstrated,” he said.
With the cash-strapped government’s cumulative revenue collections for June 2014 amounting to $1,7 billion — against a target of $1,8 billion — a 6,1 percent shortfall of total projected revenue was recorded just as first half expenditure raced to $2 billion.
This exceeded the $1,8 billion target, while the civil service wage bill shot up to $1,5 billion, meaning total expenditure represented 76 percent.