Zimbabwe's Economy To Contract By 20 Per Cent - Mthuli Ncube

Finance and Economic Development Minister Mthuli Ncube has appealed to multilateral lenders to provide Zimbabwe with an urgent bailout package, saying the country’s economy was likely going to contract by 20 per cent this year.

In a letter dated April 2 and addressed to International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, Ncube says Zimbabwe’s economy could contract by between 15 to 20 per cent, with serious social consequences. He wrote:

The Zimbabwean economy contracted sharply in 2019, amplified by climate shocks that crippled agriculture and electricity generation.

Growth is projected to contract further in 2020, with domestic demand expected to be significantly depressed from the lockdown put in place as a preventive measure to stop the spread of the virus.

Cumulatively, Zimbabwe’s economy could contract by between 15 to 20 per cent during 2019 and 2020 – this is a massive contraction with very serious social consequences.

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Already, 8.5 million Zimbabweans (half of the population) are food insecure, from Cyclone Idai and successive droughts, health services are inadequate, and poverty levels are rising. These indicators are expected to worsen.

Ncube further pleaded with the IMF for financial support and arrears clearance plan that can mitigate what he calls a looming crisis.

Immediate financial support for urgent health spending and the normalization of relationships with Zimbabwe’s creditors both bilateral and multilateral, will both be indispensable for the country to be able to respond effectively to the global pandemic, Ncube added.