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July 20, 2021

Cement maker, PPC Zimbabwe, acknowledged receipt of US$11,2 million from the Reserve Bank of Zimbabwe under the legacy debts repayment facility. The debt accrued as a result of cash flows generated in Zimbabwe by foreign entities that could not be repatriated to foreign suppliers due to foreign exchange shortages.

Treasury Audits Billions Held in Blocked Funds

Treasury Audits Billions Held in Blocked Funds - Treasury started validating blocked funds, which the central bank last year estimated at over US$1,3 billion, that could not be repatriated due to shortage of foreign currency, for consolidation into national debt. An update from the Treasury's Debt Office puts the cumulative blocked funds figure at an estimated US$2,9 billion.

Government moves towards stricter debt management

Government puts in place new debt management framework that will be used to evaluate its loan guarantees and on-lending in a transparent and objective process meant to guard against adverse impact of contingent liabilities on public finances. It is called – ‘Framework for Evaluating, Monitoring and Managing Guaranteed and On-lent Loans’ 

Reopening of the economy after the COVID-19 Induced lock-down with resumption of inter-city travel

Inter-city travel was suspended when the national lockdown started on March 31 to contain the spread of Covid-19 infections. However, Cabinet approved proposals for the return of long-distance buses but under strict Covid-19 preventative guidelines informed by the World Health Organisation (WHO).

Despite the continued easing of restrictions, Cabinet reiterated that Zimbabwe was not out of the woods yet in its fight against the pandemic which has so far infected more than 7 000 people, killing more than 200.

Zimbabwe on course to meeting 2020 budget deficit target: Mthuli Ncube

Zimbabwe’s finance minister Mthuli Ncube said on Monday the country was on track to meet its budget deficit target of 1.5% of GDP in 2020 in a key update that was absent from his mid-term budget last week. Ncube, said he would not seek additional funding this year since the national treasury had spent less than half of its budget despite pressure from the COVID-19 pandemic. “I am still focusing on a budget deficit of 1.5% of GDP and we are well on our way to achieving that,” Ncube said during a review of the half-year budget held virtually. This would be an improvement on last year’s 4% deficit.

Avoidance of costly debt bail out

Zimbabwe is pursuing a less costly multi-million dollar bailout package from the Group of Seven (G7) wealthy nations to avoid contracting choking and expensive commercial debt for the funding it needs to clear arrears with major global lenders, according to Finance and Economic Development Minister Professor Mthuli Ncube.The Southern African country has for over nearly two decades failed to unlock fresh and cheaper external lines of credit due to lingering debt to the global lenders and Minister Ncube contends the G7 hold the key to Harare’s debt freedom.

Appointment of the Monetary Policy Committee

Finance and Economic Development Minister Professor Mthuli Ncube has appointed a nine-member monetary policy committee (MPC) of the Reserve Bank of Zimbabwe (RBZ), which is chaired by central bank governor Dr John Mangudya. The appointment of the committee comes at a time Zimbabwe is deep in the process of currency and economic reforms meant to restore key fundamentals in order to stabilise the economy to place it on a firm path to sustainable growth.

Zimbabwe abstains from external borrowing to build fiscal discipline

Zimbabwe will not borrow externally and will cut reliance on the central bank to finance deficits during an IMF staff-monitored programme in a bid to set a track record of fiscal discipline that could earn it future funding, the IMF said. The owes $8.8 billion to foreign lenders, $2.6 billion of that in arrears to the World Bank, the African Development Bank and the European Investment Bank. It has not accessed financing from international institutions since defaulting on its debt in 1999. It is also suffering from a dollar crunch, rising inflation and public anger over shortages - all issues that have piled pressure on President Emmerson Mnangagwa who has promised to revive the economy after the fall of Robert Mugabe. His government agreed to have its economic and political reforms monitored by the IMF from May 15 to March 15 2020,  to try to convince foreign donors to restructure and forgive its debt. In a report released on Friday, the IMF said Harare authorities pledged to only borrow RTGS$400 million from the central bank in 2019, down from RTGS$3 billion in 2018. The treasury will also cut the government’s salary bill to 67 percent of the budget, down from 79 percent last year and slash the budget deficit to 4% of GDP, in line with earlier projections, the IMF added.

Government achieved budget surplus in October 2018

Ongoing- Minsiter of Finance Commits to Reducing the National Budget deficit in 2019

The Zimbabwean Treasury proposed to drastically reduce the national budget deficit in 2019, state media reported Friday. The reduction will be made through interventions such as limiting government borrowing from the central bank, tightening of Treasury Bills issuances and cutting travel and wage bills.