GOVERNMENT yesterday released details of the $18 billion
Economic Recovery and Stimulus Package aimed at reinvigorating the economy
following slowdown induced by Covid-19.
The bulk of the money is going towards the agriculture
sector. Last week, President Mnangagwa unveiled the package to provide relief
to individuals, families, small business and industries as well as controlling
the health crisis.
The main elements of the recovery proposal look at
providing critical liquidity support to all productive sectors, protecting
employment through prevention and minimisation of Covid-19 induced lay-offs.
According to a document released by the Minister of Finance
and Economic Development Professor Mthuli Ncube yesterday, $6,1 billion of the
total economic recovery and stimulus package would be allocated to the
agriculture sector.
“Agriculture is a key sector in the economy and Government
is committed to ensuring food and nutrition security. The Covid-19 pandemic
requires that grain imports be minimised where possible. To this end, $3,2
billion will be set aside to fund a comprehensive winter wheat programme,” he
said.
A total of $2,880 billion will be released to support the
2020/21 summer cropping season.
Prof Ncube said financing of the upcoming summer cropping
programme will continue to be reviewed as the full impact of the Covid-19
becomes known.
“However, it is anticipated that a significant upward
revision of the resources for the Vulnerable Farmers Input Support Programme is
necessary and an amount of $2,880 billion will be made available to small-scale
and communal farmers,” he said.
It is hoped that Government will soon be releasing $3,02
billion.
For the above facility, provision of Government guarantees
of to $2,5 billion bank loans will be disbursed to allow companies hit by the
impact of the global pandemic to access working capital.
Prof Ncube said an equity injection of $500 million was
also earmarked for capacitating Silo Food Industries to enable the entity to
scale-up operations.
A targeted investment of $20 million will be disbursed to
companies in the leather and textile value chain.
The mining sector, which is one of the country’s economic
mainstays would be supported through a $1 billion stimulus package targeting
small- and large-scale miners.
“Part of this funding will be available in foreign
currency,” he said.
As part of measures to support the mining sector under the
above facility, Government will guarantee fuel and power for the mining sector
to ensure production is not disrupted.
In addition, the Government will resuscitate closed gold
mines by designating them under the Special Economic Zones concept.
Prof Ncube said to encourage investments and exploration
activities within the mining industry, Government was set to reduce application
fees and annual rentals.
Government through the Ministry of Mines and Mining
Development is also expected to speed up the implementation of computerised
cadastre system to create confidence in the management of mining titles and
strengthen security of tenure to promote investment.
From the $18 billion, $500 million has been earmarked for
supporting the Medium, Small and Medium Enterprises sector to assist them
quickly recover from the effects of Covid-19.
Said Prof Ncube: “Government will provide these resources
through additional capitalisation to SMEDCO (Small and Medium Enterprises Development
Corporation), the Women’s Bank and Empower Bank to enable them support small
businesses to access working capital.”
The tourism industry is also set to receive a $500 million
funding support.
The arts industry will also be supported by $20 million to
assist performing artists in Covid-19 recovery efforts after Government noted
that artists play a critical role in spreading the global pandemic messages and
have been equally affected by the adverse impact of the disease.
A $1 billion health sector support fund is also on offer
and Government has come up with a raft of measures to support the sector, among
such initiatives as having all Covid-19 personnel to be covered by a 24-hour
personal accident cover while on duty.
“In addition to the $6,5 billion which was allowed for the
health sector in the 2020 budget, Government has ring-fenced the health levy
collections for the next six months for Covid-19 response expenditure, an
additional 4 000 personnel will be recruited, and frontline health personnel
will earn a tax free risk allowance,” he said.
Prof Ncube said the Government has introduced a food grant
to support at least one million vulnerable individuals for a period of eight
months to cater for food needs.
“Within this, are the 200 000 micro enterprise owners whose
businesses have been disrupted by the lockdown over a period of eight months,
the expenditure will be $2,4 billion,” Prof Ncube said.
Other relief measures include the relaxation of import
duties on selected raw materials for the next three quarters of the year.
The Government has also come up with corporate tax credits
for Covid-19 donations while lending interest rates have been lowered to not
more than 20 percent with loans restructured to allow businesses to recover.
The private sector has joined hands mobilising resources to
complement Government in the fight against Covid-19.
“A comprehensive reduction of statutory reserve requirements
on banks will be implemented in order to release $2 billion of liquidity on
order to increase the capacity of banks to lend,” he said.
The economic recovery and stimulus package Government has
unveiled is nine percent of the Gross Domestic Product and 29 percent of the
2020 national budget.
This, Prof Ncube said reflects Government’s desire to
continue sourcing resources to meet fully the challenges imposed on the
citizenry and the economy by the global pandemic. Chronicle
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