Zimbabwe has received heavy rains this year and Chinamasa has revised the country’s economic growth outlook for the current year to about 3.7 percent from 1.7 percent earlier announced.
However, top economists say this will not be achievable as the country still needs to fix its investment policies and restore certainty to the business operating framework.
And with the country just emerging out of a drought period that necessitated food aid to a greater portion of the population, Zimbabwe has launched an appeal for humanitarian aid after the displacement of villagers in the country’s southern provinces. “The damage caused by the rains has been worse than expected and this has affected roads and destroyed homesteads,” Chinamasa said.
“People have been left homeless and they will require relocation and building up of infrastructure and preliminary assessments indicate that $200 million (R2.53 billion) is required.” The government estimates show that more than 200 people may have died as a result of floods.
Read also: Rural Zimbabwe empties
Damages to infrastructure have been most evident in the road networks in both urban and rural areas as well as in resort cities that are crucial for tourism income.
The funding requirements will further strain Zimbabwe’s revenue position as it is already struggling to grow the economy, pay off its debts and breathe fresh capacity into key rail, road and electricity parastatals.
“It’s a burden that has just emerged and it surely will stretch the government’s funding position, hence the appeal for humanitarian aid. We may see the gains in agriculture being reversed by this new funding requirement at a time when the government is stretched and financiers are sceptical about Zimbabwe owing to liquidity and pay-back challenges,” said economist Moses Moyo.
Amid the scepticism, Chinamasa said the government had put in place measures and structures to ensure that the humanitarian aid funds were utilised for the right purposes as President Robert Mugabe’s government deals with funding gaps and warnings against continuous issuance of Treasury Bills to plug the gaps.
The central bank has issued $2 billion constituted of $780 million to cover for debt assumption, $300 million for recapitalisation, about $450 million for government expenditure bills.