Zimbabwe secures $500m loan amid load shedding woes

While the country buckles under intense load shedding schedules, the Reserve Bank of Zimbabwe has sourced a $500-million (R7.19-billion) as a response to ease the dollar crunch.

As reported by Business Day, a week after Zimbabwe included load shedding to its lengthy list of problems, the country’s central bank has sourced funding of billions of dollars to aid its flailing interbank currency trading.

Where did Zimbabwe get the loan from?

In the wake of the recent fuel protests, the country introduced a new local currency: the real-time gross settlement (RTGS) dollar.

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After a decade of switching currencies and defaulting with shortages of the dollar due to increased demand for imported goods, the central bank sought help from five international banks.

According to the governor, John Mangudya, the injection of this loan will go a long way in “stabilizing the exchange rates and prices of goods and services in the economy.”

However, speculation has grown around the loan after the government failed to make mention of where this much money was sourced from.

Finance Minister, Mthuli Ncube, also failed to mention the loan’s source, in his recent tweets. He applauded the central bank’s efforts in finding soluble ways to address the inflation rate that sits at a staggering 75.6%.

Related: Load shedding: “We will assist if asked” – Eskom opens doors for Zimbabwe

Load shedding threatens Zim’s stumbling economy

The country, however, is dealing with another looming problem that could turn its economy on its head.

Due to shortages of water reserves at its biggest hydroelectric power plant, the Kariba Power Station, most parts of Zimbabwe have been plunged into darkness by six-eight hour rotational outages.

Zimbabwe’s power utility, Zimbabwe Electricity Transmission and Distribution Company (ZETDC) implemented rotational power cuts across the country in a bid to relieve the strain that is felt by the country’s power grid.

With very limited alternative energy options, the private sector has been shaken by a bleak future.

Related: Zimbabwe plunges into darkness with eight-to-ten-hour load shedding

The president of the Conferedation of Zimbabwe Industries, Sifelani Jabangwe, warned that if this issue has been left unaddressed, the economy will suffer the most.

“We have had one or two incidences where some of our members caught in load shedding areas have complained about disruption in production but generally speaking, industry is being prioritised at the moment.

“But it’s something that can eventually affect us going forward if measures are not taken to curb further shortages. We, therefore, encourage the Government to increase imports because, as industry, we need power to produce and without production, the economy hurts further,” he said.