World

AfDB bails out Zim



NDAMU SANDU

The African Development Bank (AfDB), will avail a US$13.7m grant to Zimbabwe to help mitigate the impact of COVID-19 pandemic as the bank heeds funding pleas by the Southern African nation.

The funds will provide an immediate lifeline for targeted frontline responders and health personnel and boost the country’s Global Health Security Index in the wake of the novel coronavirus pandemic, the Abidjan-headquartered bank said in a statement Friday.

It said the approval of the grant was made on May 13 after a plea by Zimbabwe.

“The funds, from the African Development Fund (ADF) 14 Transition Support Facility, will go to Zimbabwe’s COVID-19 Response Project (CRP), which aims to mitigate the impact of the COVID-19 pandemic on a country which is facing many economic and social challenges,” AfDB said.

The CRP, it said, would focus on 15 high-density urban suburbs in Harare the capital, satellite townships and targeted health facilities in other areas of the country.

Activities under the project include boosting capacity in Covid-19 prevention and management protocols for healthcare personnel and populations in targeted regions, and increasing access to Covid-19 hand washing facilities in Harare, satellite townships and other affected regions.

The project will also supply Covid-19 medical equipment and laboratory test kits, personal protective equipment, set up handwashing facilities through rehabilitation/construction of boreholes; and training of healthcare personnel and laboratory technicians at community level on Covid-19 prevention and case management protocols.

“The project  which will be implemented by the World Health Organisation, with the country’s Ministry of Health and Child Care acting as executing agency, is expected to directly benefit over 680,000 people,” AfDB said.

“It will leverage on planned activities to contribute to strengthening the resilience of the health system, while protecting the livelihoods of the vulnerable population in Zimbabwe beyond the end of the pandemic.”

Zimbabwe is currently under lockdown to contain the spread of the pandemic which began in China’s Hubei province in December last year.

To date Zimbabwe has 37 confirmed cases, four deaths and nine recoveries.

The AfDB grant comes after Zimbabwe extended its begging bowl to the international community to help cushion the impact of the pandemic on the already fragile economy.

Zimbabwe is on its own and cannot get cheap bailout from the International Monetary Fund (IMF) as it owes other international financial institutions.

In March, IMF unveiled a US$50bn coronavirus shock absorber facility for low income and emerging market countries. The Catastrophic Containment and Relief Trust facility is funded by grants and Zimbabwe does not qualify as it has no debt service payment obligation to the fund.

Zimbabwe cannot tap into IMF’s Rapid Credit Facility which helps countries battered by coronavirus as the southern African country has arrears to International Financial Institutions.

But Harare wants to buck the trend as it pleaded with international financial institutions to extricate the economy which is projected to contract by between 15 and 20% this year. In a letter to IMF managing director Kristalina Georgieva, Finance Minister Mthuli Ncube said Zimbabwe faces a gloomy outlook post-Covid-19.

Ncube said the World Bank Group estimates a financing gap of almost US$1bn to finance spending for health, education, food security and social protection of about US$200m was needed for unplanned Covid-19 pandemic expenditure. Ncube said there is no fiscal space to finance the expenditure.

“Absence of external financing, the budget deficit will have to be financed domestically, which will drastically increase inflation (currently over 500% year on year) and destabilise the exchange rate,” he said in a letter dated April 2, 2020.

“Such financing would be counterproductive to our key objective of establishing macroeconomic stability.” 

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