There has not been much attention given to the role of free funds in the Zimbabwean Economy. Economists have not paid attention to this critical area perhaps for good reason as there is little public information available and also the fact that they appear as an Index to the National Budgets.

Free funds can be defined as funds parked in the economy for various purposes with no immediate need to liquidate them. Their availability during their tenure helps stimulate economic growth through the multiplier effect. They also boost business and market confidence.

The significant inflow of free funds has a positive influence and if often followed by the inflow into the formal banking systems and we need no other case study than the Government of National Unity period which began in 2009 and ending in 2013.

The million dollar question is where did funds to kick start the economy come from in 2009? Did the economy receive significant bail outs from leading lenders such as IMF and World Bank? Not much came from these leading international lenders.

So who opened the funding valves? The answer lies squarely in the 2009 Budget under the Annex Table (Consolidated Donor Support). The period witnessed a ramp up in Donor Aid funding to Zimbabwe compared to previous years and this persisted throughout the GNU period.

To make it easier for readers, take for instance a leading Donor Agency that approves aid worth $800m to Zimbabwe and if all the funds are transferred to local banks in the first quarter of the year but being used for the next 8 months. The funds automatically become free funds and banks can lend to borrowers for productive use in the economy.

This helps boost business confidence which explains why in 2009 even cash kept at home ended up being channeled into the formal banking system.

Averaging a USD 1 Billion per annum from 2009 to 2022, the roleplayed by free funds cannot be underestimated especially in an economy where lenders have not provided significant loans and bail outs. Apart from Afrexim Bank and more recently, The IMF US$900m SDR Facility-there hasn’t been a significant inflow of funds by external lenders.

Researches and student of Economics therefore need to study the National Budget Annexes from 2009 to date and also review external loans extended to the nation during the same period.

The 2022 National Budget showed a massive slump in the Free Funds and we raised concern on the implications of half the budget or possibly lower than half coming into Zimbabwe’s coffers.

The budget clearly showed Free Funds flight and add other complex matters arising, the nation in a foreign currency squeeze characterised by steep currency rates hikes. To solely point towards Free Funds flight would be incorrect as in 2022 Zimbabwe received a record US$12 Billion in export receipts leaving a positive trade balance of US$300 million according to Take-Profit Organisation.

Although the trade balance has been sliding into negative territory, however the fast depreciation of the local currency in May 2023 is unprecedented. And the slide continues well into June 2023 and showing no signs of stopping. This is what prompted this write up-did the gap of free funds in 2023 precipitate the current volatility?

What is the sensitivity of free funds to the economy?

Should the situation return to normalcy, will free funds have played a critical role?

Mumpreneurs made history on the 22nd of April 2023 with a record 130 members attending the launch of the Mumpreneurs Forum initiative at Queen Elizabeth School.

Launching initiatives in Zimbabwe no easy stroll in the park and getting above 50 attending a record achievement. Who are Mumpreneurs? Ladies running businesses and those interested in running businesses. And they fall under the Zim Business Ideas and Network forum.

We had superb presentations from Mumpreneurs and a representative of ZB Bank—Lorraine, Mumpreneurs brought various goods for sale and also enjoyed networking.

Presentations

Lorraine from ZB Bank: Awesome presentation and the good news is ZB Bank would like to partner with ZBIN inorder to facilitate smooth opening of banks. They will consider waivers on proof of residence for some—and possibly collateral in consultations with the forum. Great opportunity for members in pursuit of financial inclusion. Thank You ZBIN and we hope thousands of Zbinites will consider ZB as a bank of choice!

MCs Dr Musariri and Gwen Chikofi: Chitungwiza has exceptional talent and the 2 Mumpreneurs delivered top notch experiences.

Other Presenters: The forum enjoys giving our members opportunities to showcase their talents. Brilliant presentations from Gwenn Chimuti, Luwy Kay Kusemwa, Auntie Thandie, Lilian Paraffin, Vongai Modester Mupfiga, Coach Mazvita, Chrystal Mushonga, Monica Zodwa Cheru(Zim Now), Freda Chingwe (Mom of Nations) and Sherz Zhonge. Unfortunately not enough time for the presenters but they delivered memorable powerful presentations.

Credit goes to everyone who sacrificed to attend and support the event. You made history and like the motto—Lets fly together, the Mumpreneur Plane took off from the runway today. What is left is the review of today’s event—plugging areas that need improvement and getting ready for the next event.

· Access to markets looks promising as the market fairs are set to attract more people.

· Access to capital could be made easier through collaborations with leading financial institutions such as ZB Bank.

· Access to the government and the corporate sector seem enhanced through well organised and attended events like what you did today.

The next steps—capturing of today’s event proceedings and photos into the Mumpreneur Magazine which we hope will make a huge impact in the business sector. Review of today’s event and planning for the next event and follow ups with ZB Bank.

Credit goes to the sponsors and we are forever indebted for the support. The guests who attended and actively participated, the organising team and of course the lady who failed to eat yesterday as she ran around trying to make the event work—Leah Makamanzi Mugari.

You may have missed The Mumpreneur Launch—not bad but we hope you do not miss the next one.