Online Reporter
Oliver Kazunga
Senior Reporter
THE International Monetary Fund (IMF) has urged Zimbabwe to build a US$275 million war chest to shield the country from a possible 2027 food crisis and renewed global shocks.
The proposed buffer, to be built from stronger-than-expected 2026 revenues, could give the Government the financial muscle to buy grain, protect vulnerable households and respond to a potentially severe El Niño without piling up fresh arrears.
In its first review under the Staff-Monitored Programme report released last week, the IMF said the economy’s stronger-than-expected revenue performance has created room to build the cushion while keeping spending within the original US$9,5 billion 2026 budget.
“Even after assuming increased private grains imports, staff estimate that building a fiscal buffer of at least US$275 million from the stronger 2026 outturn—alongside conservative planning for the 2027 budget— would allow the authorities to respond quickly to food-security needs while avoiding arrears and protecting priority social spending,” said the fund.
The recommendation follows a recent announcement by the Ministry of Agriculture, Mechanisation and Water Resources Development that the Government has rolled out a comprehensive six-point strategy to safeguard national food security and cushion farmers against a forecast drier-than-normal 2026/2027 summer season, with the Summer Cropping Plan now approved by Cabinet and implementation set to begin in earnest.
The strategy, anchored on strengthening the Strategic Grain Reserve, scaling up climate-smart agriculture, expanding agricultural financing, protecting livestock, facilitating strategic food imports where necessary, and reinforcing coordination and early warning systems, is designed to ensure Zimbabwe sustains agricultural production despite the El Niño threat.
“The materialisation of these risks could half projected 2027 growth, reduce revenues, and increase government spending to procure grains to protect vulnerable households,” the IMF said.
The proposed US$275 million buffer would act as a financial shock absorber, allowing the Government to move quickly if food supplies tighten or prices surge without destabilising the fiscus.
The fund’s recommendation comes as Treasury enjoys a significant revenue windfall, with 2026 revenue now projected to reach US$10,3 billion — substantially above both the IMF programme projection and the original budget.
“To this end, staff proposes adding a quarterly indicative target setting a floor on central government deposits at the RBZ and commercial banks, with a symmetric adjustor for revenue over- or underperformance relative to the indicative revenue target—proposed to be revised to US$10,3 billion — and an adjustor to accommodate grain purchases for the strategic reserve given concerns about possible pressures on prices and availability next season,” it said.
The revenue surge reflects stronger economic activity, buoyant VAT and customs collections, higher personal income tax receipts following public wage increases and continued improvements in tax administration.
Government’s spending this year is projected at the original budget level of US$9,5 billion, with the additional revenues helping create the US$275 million cash buffer.
And the IMF recommends that the buffer be protected through a new quarterly target, setting a floor on Government deposits at the Reserve Bank of Zimbabwe and commercial banks.
The fund believes the proposed framework would also allow the authorities to draw on the fiscal space for strategic grain purchases if food prices or availability come under pressure.
The urgency of the recommendation is underlined by Zimbabwe’s recent economic performance.
The economy grew by a stronger-than-expected 8,3 percent last year, up from 1,7 percent in 2024, buoyed by mining and a recovery in agriculture after the 2024 drought.
The positive growth trajectory has continued this year, with gold production rising, tobacco enjoying a bumper season — and the tourism sector remaining resilient despite global disruptions induced by the conflict in the Middle East.
And the Middle East conflict has already pushed up fuel, food and fertiliser prices, while higher energy costs and possible shipping disruptions could add further pressure.
The IMF expects growth to remain robust at five percent in 2026, although it projects a slowdown to 4,2 percent thereafter while the fund projects that Zimbabwe’s annual inflation will reach 8 percent by the end of the year.
The proposed fiscal buffer also comes against the backdrop of Zimbabwe’s unresolved debt burden.
The IMF estimates that the country’s total public and publicly guaranteed debt stood at US$22,7 billion at the end of last year.
“The total public and publicly guaranteed debt is estimated at US$22,7 billion (38 percent of GDP) at end 2025 — lower than estimated earlier due to the higher nominal GDP.
“The external public debt stock at end-2025 stood at US$15,2 billion (25,5 percent of GDP), over 50 percent of which is in arrears vis-à-vis its external official creditors,” it said.
Despite the debt overhang, Zimbabwe has recorded strong progress under the IMF Staff-Monitored Programme, meeting all five quantitative targets.
The fund said the stronger fiscal performance provides an opportunity to strengthen Zimbabwe’s financial defences rather than allow temporary revenue gains to translate into additional spending pressures.
