Prudent PFM & Social Accountability key in managing SDR funds in Zimbabwe
By: Mcauthur Mkwapatira
Tags: Zimbabwe, Transparency, Accountability, Public Finance, Equitable Development

Prudent PFM & Social Accountability key in managing SDR funds







Zimbabwe recently received US$956 million from the International Monetary Fund (IMF) as part of the IMF Special Drawing Rights (SDR) allocations to member states meant to cushion them from the devastating effects of the COVID-19 pandemic. In a joint statement by the IMF and Ministry of Finance and Economic Development (MoF), the latter pledged to allocate the SDR funds to social services, productive sector and infrastructure development. CSOs like the Zimbabwe Coalition on Debt & Development (ZIMCODD), on the other hand, have emphasized the need to prioritise social welfare for vulnerable citizens (7.9 million poor) whose lives were worsened by lockdowns in the pandemic. However, imprudent Public Finance Management (PFM) and lack of transparency and accountability to citizens threaten to undermine the realization of these noble goals if political elites loot and fatten their pockets at the expense of citizens.



Zimbabwe’s PFM institutions are ridiculously weak and make us vulnerable to detrimental corruption. There continues to be blatant disregard for regulations by public officials who, despite being called out in numerous Auditor General’s reports, continue to loot with impunity. Transparency and accountability are very low and the few grand corruption suspects exposed walk free while whistleblowers like are the ones who face the wrath of the criminal justice system. In 2020, the Covid-gate scandal made news internationally as government gave US$60 million to a shady briefcase company named Drax International after the then Minister of Health, Obadiah Moyo, used his influence to circumvent mandatory Procurement Authority of Zimbabwe (PRAZ) processes and award a tender to the company. Both Obadiah Moyo and Delish Nguwaya, the briefcase company’s rep, are walking free having paid bail and will likely stay free in another classic case of Catch & Release. There’s numerous other corruption scandals to mention but they all end the same way: with perpetrators walking free and citizens shortchanged.







So, the US$956 million Zimbabwe got from the IMF could very easily result in political elites mopping up most of it and delivering minimum value the way folks like Wicknel Chivhayo have done in the past with impunity. They’ll get richer while nothing changes for citizens, majority of whom continue to live in abject poverty and sink deeper with each passing day. Also, given how everyone seems to be in elections mode already, the ruling party may divert the funds towards more cars for chiefs or some other campaign tricks veiled as legitimate government programmes. There’s countless ways the money could be looted and this creates significant risk of the money being just another billion government is unable to account for and which citizens never benefit from.







That said, Parliament, especially the Public Accounts Committee, should be vigilant in demanding transparency and accountability on management of the SDR funds. MPs must push for the making and publication of a clear and comprehensive budget detailing how the funds will be utilized, which sector gets how much, for which project and in which province? These details will be essential in tracking implementation through periodic reviews and everyone must play their part in demanding that MoF releases them.







There’s also need to track the disbursement of social welfare funds to prevent another instance of some "sophisticated algorithm" preventing vulnerable citizens from accessing needed funds again or government reneging on its promises. Poverty increased sharply under lockdown since 2020 with the informal sector — on which majority of citizens depend — being stifled. The only social assistance disbursed so far is grossly inadequate with the few who received it getting about ZWL$200 (US$2) once in 2020. Both parliament and CSOs must, therefore, work diligently to ensure the money gets in the hands of the vulnerable people who need it and blow the whistle if it doesn’t.







Moreover, all eyes must be on the PRAZ to ensure all procurement procedures and principles are followed to the letter and only the best players in terms of capacity, quality and cost get tenders for projects. If history is anything to go by, political elites and their surrogates are likely getting ready to pounce on the SDR funds by getting tenders then never delivering the agreed-upon value once they’re done chowing the money. PRAZ must work to prevent that and ensure the SDR funds make the impact both government and CSOs have said they can.







Lastly, the Zimbabwe Anti-Corruption Commission (ZACC) must be on high alert for any instances of mismanagement of the SDR funds. The commission must work impartially and effectively for once because this is a golden opportunity Zimbabwe has gotten given the very low interest rate on the SDRs of 0.05% per annum (around US$500k) which makes the funds practically free given the large financial mustles of governments.







In conclusion, the SDR funds Zimbabwe received could make a huge positive difference in the economy and lives of citizens. The economy has been shrinking and poverty increasing consistently for the past several years. The SDR funds present an opportunity to change that and jumpstart a recovery. But that’ll never happen if the money is looted or diverted to unproductive activities that benefit political elites at the expenses of ordinary citizens. Government, Parliament, CSOs and concerned citizens must thus work diligently to prevent the abuses of yesteryear and ensure the money is utilized prudently. A concerted effort is needed to ensure the country capitalizes on the funds to promote equitable economic growth and sustainable development.