FOR an economy that has struggled to stabilise a currency that has depreciated at a frightening scale lately, the US$1 billion injection from the International Monetary Fund (IMF) this week was a timely shot in the arm.
The injection assumes even greater importance after considering that Zimbabwe has been shut out of domestic and foreign credit lifelines in the past 21 years. There has been high level theft of public funds, a soiled human rights record and endemic corruption, which have catapulted the super-rich into the top spots of Africa’s wealthy ranks, while the poor struggle to make ends meet.
Domestic banks are sitting on a US$1,7 billion war chest, while the Reserve Bank of Zimbabwe (RBZ) struggles to reseal fault lines stemming out of currency fragilities.
An injection of US$1 billion has often cropped up in meetings, as what Zimbabwe requires to calm market jitters. Those that have brought this figure up were looking at borrowing on the international markets at punitive rates due to Harare’s high risk profile after defaulting on debts many years ago.
This is why the temptation to mortgage Zimbabwe’s minerals has been gaining traction. But the IMF’s windfall, part of a US$650 billion special drawing rights (SDR) dispatched to members on Monday, is like a dividend.
It has no interest, and is free from the conditionalities that have destroyed many governments.
If used wisely, it gives the government a chance to redeem lost confidence.
But surely, the IMF, other global lenders and foreign investors are watching to see if rogue regimes will not loot these windfalls. Zimbabwe has been hogging headlines all for the wrong reasons.
It will be sad to return to the global limelight over financial delinquency again and further hurt the national brand.
Lenders with a modicum of confidence on Harare will further shut out the doors to cooperation and look elsewhere.
The good thing is the government this week laid out what looked like a solid plan on how the windfall will be used.
They want to rebuild roads, repair and capacitate schools and hospitals, sort out the decaying sanitation system and help vulnerable groups.
They also want to stabilise the currency and chip in with fresh capacities to stimulate production.
There are political hawks waiting on the wings to pounce on backstage opportunities and line up their pockets.
The politically connected, who purchase limos and high-end real estate gems through corruption are looking at how they can loot. They will file up tenders and influence outcomes.
It will look like genuine business deals to the public, but so much would have taken place behind the scenes to get the looters to clinch deals, inflate prices and walk off with millions.
In the end, this windfall will not drip down to the needy, but remain in affluent suburbs.
Zimbabwe must watch out and not give space to these ‘potential’ looters.