Biti draws $110m to boost economy

Zimbabwe will, with immediate effect, withdraw $110 million from the Special Drawing Rights (SDR) allocation account at the International Monetary Fund (IMF) in a bid to ease the liquidity crunch.

Briefing journalists on post-Budget economic developments yesterday, Finance minister Tendai Biti said the funds would help ease the liquidity challenges affecting the country and also finance critical projects not adequately covered by the 2012 Budget.

At least $40 million will be channelled towards infrastructure projects including electricity, water and sanitation.

Biti said $30 million would be allocated for lines of credit to productive sectors of the economy currently operating at low capacity.

He said $20 million would go towards the $100 million announced in 2012 Budget in support of $7 million allocated in 2010.

“To augment resources allocated in the 2012 Budget, Treasury is withdrawing resources amounting to $110 million from Zimbabwe’s general SDR allocation account,” Biti said.

“Right now we are in the middle of a typhoid outbreak here in Harare. It’s important that we rebuild Harare water, Bulawayo and that of Marondera.”

He said it was critical that whatever capital is found is injected into the economy.

Before the $110 million drawdown, the balance in Zimbabwe’s general SDR allocation account at the IMF, net of the $142,1 million owed to the IMF’s Poverty Reduction and Growth Fund facility account was $212 million.

Previously Zimbabwe had made two withdrawals: $50 million in December 2009 and a further $100 million in February 2010 in support of various infrastructure projects from the resources allocated by IMF to members to build their reserves after the global financial crisis.

In August 2009, Zimbabwe was allocated $505 million by IMF to shore up its reserves as part of a bailout given to member countries.

Of that amount $411,9 million was under the general SDR allocation while the special allocation of $93,1 million was escrowed pending the clearing of the PRGF debt.

In an overview of the Budget, Biti said the country recorded a marginal Budget surplus of $30 million after collecting $2,921 billion and spending 2,890 billion.

“The positive outturn allowed for government to post a small positive opening balance, which became available for supporting Budget expenditures in January 2012, mainly salaries and pension payments, at a time when revenue inflows are seasonally low,” Biti said.

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