Zimbabwe has been granted a US$ 1 billion loan to help it mitigate the economic shocks caused by the Coronavirus pandemic.
Zimbabwe is classified as a lower-middle-income blend country.
As a result, the US$1 billion financings comprise of US$750 million credit from The International Development Association (IDA) and a further 250 million loan from the International Bank for Reconstruction and Development (IRBD).
According to the UN, Zimbabwe’s economy shrank by some 6.5 per cent in 2019, and the World Bank projects a further contraction of 5 to 10 per cent in 2020 as a result of the pandemic.
This would be disastrous, affecting, disproportionately, the poor and vulnerable, small and informal businesses, and small-scale agricultural producers.
Slower imports could cause shortages and spiking inflation, deterring badly needed investment and worsening widespread poverty among Zimbabwe’s 14 million people the UN further said.
This loan grant may go some way in alleviating these negative consequences on the economy.
World Bank Country Director for Zimbabwe, Felipe Jaramillo last week announced that they are committed to supporting their clients during very challenging times.
“COVID-19 represents an unmatched shock to the global economy. The World Bank remains very committed to supporting our client countries in these very challenging times,” Jaramillo said.
“This operation provides resources to help Zimbabwe navigate the current COVID-19 crisis and to cushion the impact on livelihoods and jobs while supporting the continued operation of essential public services,” Jaramillo further added.
The World’s Bank grant comes at a time when the IMF curiously left Zimbabwe out of an debt relief programme for the Bank’s 25 ‘poorest and most vulnerable’ members.