malvernmugadzikwa
Business Writer
THE US$958 million Special Drawing Rights (SDRs) allocation advanced to Zimbabwe by the International Monetary Fund (IMF) in August 2021 will go a long way in supporting the country’s economic recovery efforts in 2022.
Economist, Persistence Gwanyanya, revealed this at the Marketers Association of Zimbabwe luncheon 2022 held last Friday.
The SDR came at an appropriate time when the country is implementing the National Development Strategy 1(NDS1) whose key objectives include retooling the country’s strategic sectors.
Finance and Economic Development Minister Professor Mthuli Ncube, has already indicated that the SDR will be allotted to areas that support strong economic recovery efforts, among them agriculture, industry, mining and manufacturing as well as social sectors such as health and education.
While addressing delegates at the luncheon, Gwanyanya indicated that the local economy was poised for growth given the momentum in the agriculture, construction and manufacturing sectors, which performed encouragingly last year.
He acknowledged the strides that have been made by health authorities in administering the Covid -19 vaccination programme and implored general citizens to be vaccinated in order to kick start normal economic activities without lockdowns.
“SDR allocations will go a long way in supporting our recovery efforts and consequently, IMF and World Bank recently projected recovery of the Zimbabwe economy.
“Zimbabwe has done well in terms of vaccinating its population against Covid -19 pandemic, at about 40 percent vaccination rates still lower than 70 percent recommended by IMF but the country is now way above 4 percent in low-income economies,” said Gwanyanya.
He, however, presented some of the key risks likely to be encountered in 2022 saying he was concerned with rapid exchange rate depreciation and the widening gap between the auction and parallel market rates, which he termed “worrying and unsustainable”.
Gwanyanya implored relevant authorities to tighten the auction system and clear mounting backlog of foreign currency as foreign currency demand continues to grow on the auction system.
Economic growth momentum realised in the Zimbabwean economy last year is expected to continue in 2022 driven by an anticipated good agriculture sector performance and an enhanced mining sector growth.
Construction activities in 2021 registered a 7.2 percent growth and according to Gwanyanya will this year grow by 17, 2 percent while manufacturing sector growth is expected to grow by 5, 5 percent from 6, 2 percent realised in 2021.
Zimbabwe received an allocation of SDRs amounting to SDR677. 4 million (US$958 million) in August 2021, from the International Monetary Fund (IMF) under the General Allocation of US$650 billion.
Bongani Ndlovu