Japan extends US$15 mln grant to Zimbabwe

JAPAN has extended a US$15 million grant to a local irrigation scheme to boost agriculture output as government re-assured the Asian economy of full bilateral re-engagement.

Limited access to long term capital and unfavourable weather conditions have relegated agriculture, once the mainstay of the economy to the second economic driver since 2012.

Officiating the launch of the Nyakomba Irrigation Scheme development project situated in Manicaland Province, Finance minister Patrick Chinamasa said government will use the funds from the developmental grant aid to construct irrigation facilities in a block covering 138 hectares; replace and repair pump and flood protection structure for the existing facilities and procurement of irrigation equipment.

“The development of Nyakomba Irrigation Scheme is expected to directly benefit 861 small holder farmers,” Chinamasa said.
“In this regard, the signing of this grant agreement, of JPY1,791 billion (approximately US$15 million) for the project of irrigation development for Nyakomba irrigation scheme has come at an opportune time.”
Chinamasa said government remains committed to full re-engagement with Japan as well as other bilateral and multilateral partners.

Last month government presented a debt strategy to multilateral and bilateral creditors in Lima, Peru, on October 8 before over 100 top global financial executives in an effort to break its debt trap and secure new funding from various sources to rescue the imploding economy.

Currently saddled with a debt overhang of US$10,8 billion accrued from both public and private sector borrowing, Zimbabwe’s failing economy has plunged deeper into recession since 2013 owing to limited sources of long-term finance, paralysing the country’s key sectors.

The country’s debt arrears amount to US$5,6 billion split between multilateral creditors (US$2,2 billion), the Paris Club, an informal grouping of bilateral creditor nations (US$2,7 billion), and non-Paris Club creditors (US$700 million).

The country has arrears estimated at US$1,8 billion with its three preferred creditors, International Monetary Fund (IMF), World Bank (WB) and African Development Bank (AfDB). Unlike the private sector, which has an external debt of over US$4 billion, and is paying arrears, the public sector has been in unserviced debt for nearly two decades making Zimbabwe ineligible for concessionary funding.-Staff Writer