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Govt says it disbursed ZW$21.8bn Covid-19 stimulus funding

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GOVERNMENT says it disbursed ZW$21.8 billion under the ZW$18.2 billion Covid-19 Economic Recovery and Stimulus Package although industry and trade unionists have over the last year said the funds had not trickled down to struggling companies.

The figure suggests the government overshoot the budget by ZW$3.6 million.

In his Economic and Fiscal Report For the Year 2020 “2020 Annual Budget Review” this week, Finance minister Mthuli Ncube (pictured) said the support covered economic sectors, health, tourism, agriculture, mining and social protection.

“Substantial resources were spent on establishment of isolation and quarantine centres, recruitment of more personnel in health and education sectors, procurement of PPEs (personal  protective equipment) and other medical consumables and for increased social safety nets, among others,” Ncube said.

Ncube revealed that development partners pledged US$239 million towards the Covid-19 fight with US$118 million being disbursed in 2020.

“This support was channelled towards strengthening of public health response, procurement of medical equipment and personal protective equipment as well as provision of test kits,” he said.

“Furthermore, development partner interventions assisted in the rehabilitation of Wilkins Hospital and boreholes across the country as well as capacity development of essential staff involved in the implementation of Covid-19 interventions.”

Ncube said the pandemic had a mixed impact on the economy. It was severe on sectors such as tourism,
education, health, transport, trade and international commodity prices but less severe on agriculture, mining and manufacturing.

“During the third and fourth quarter of 2020, further relaxation of trade restrictions saw exports picking up, driven by both firming of international commodity prices and volumes. Firming of most
mineral prices such as gold, platinum, palladium and nickel resulted in increased revenues from merchandise exports, which increased by 3%, from US$4.28 billion in 2019 to US$4.39 billion in 2020,” Ncube said.

“Similarly, merchandise imports grew by 4% to US$4.98 billion in 2020, from US$4.79 billion in 2019. Imports were driven by food and electricity imports.

“During the second quarter of 2020, Zimbabwe imposed travel restrictions to contain the spread of the disease. As a result, tourism activity came to a standstill with occupancy rates falling below 10%. Signs of economic activity were only witnessed during the third quarter when the sector was allowed to gradually reopen. 

“Notwithstanding the pandemic and effected restrictions, a number of companies in the manufacturing sector took advantage of the nvironment and increased their average capacity utilisation and hence volumes. Such companies included food manufacturers and producers of PPEs and other medical products required in the fight against the pandemic.”

He said the health sector also benefitted from increased demand for medical services both in terms of human capital and consumables. 

The demand for communication activities increased due to remote working and travel restrictions.
There was limited impact on agriculture as the sector was classified as essential services.

The Covid-19 pandemic however impacted revenue collections whilst also increasing government’s expenditure demands. 

“Low economic activity and travel restrictions constrained revenue collection from informal activities through intermediated money transfer tax and customs duty. IMTT collections decreased from an annual average of 10% to 7%, while customs duty taxes declined by 2%,” Ncube said.

“With respect to expenditure, government had to contend with additional expenditures for health provision including hiring of additional 4 713 health personnel, leading to additional expenditure of ZW$204.3 million by year end whilst an additional 3 000 teachers were hired from 1 June 2020, requiring ZW$66.5 million by year end.”-STAFF REPORTER

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