Harare — Finance Minister Tendai Biti has finally asked the IMF to urgently release US$50 million of the over US$500 million allocation to Zimbabwe to buy agricultural inputs for the 2009/10 cropping season.

Minister Biti has also outlined how he wants the rest of the money used; a formula similar to that proposed by Reserve Bank of Zimbabwe Governor Dr Gideon Gono about two months ago.

The IMF in August allocated Zimbabwe US$510 million as part of the institution's efforts to assist member-states weather the global financial crisis that was triggered by a credit crunch in the United States last year.

However, the money was frozen in an IMF account after Minister Biti instructed the organisation not to release any money in what was widely viewed as a personal battle with Dr Gono.

Dr Gono had said the money be used for, among other things, agricultural sector support and gave a directive to that effect in his capacity as central bank chief and custodian of such funds.

On November 25, 2009, Minister Biti wrote to the IMF saying the money should now be released for the purchase of inputs, though Government sources yesterday said the action is "too little too late".

Earlier in the month, he wrote another letter to the IMF saying the funds should be unfrozen and gave them a breakdown of how the money would be used.

The first letter, written on November 13, was directed to IMF finance director Mr Andrew Tweedie while the second was addressed to the Bretton Woods institution's Zimbabwe mission chief Mr Vitaliy Kramarenko.

It is understood that Minister Biti wrote the second letter, which specifically calls for a quick disbursement of US$50 million, after pressure mounted to demonstrate that he was genuine in his claims of supporting the agricultural sector.

He wrote: "Reference is made to my letter dated 13 November 2009 to Mr A. Tweedie, director finance department, wherein I advised of the approved proposal by Government on the utilisation of the country's SDRs and requested the IMF to convert and disburse SDR equivalent of US$50 million for the purchase of agricultural inputs for the 2009/2010 cropping season."

He instructed that the money be deposited in the ministry's National Development Fund account with FBC Bank.

"In line with our policies, all Government account balances are not subject to statutory reserve requirements . . . I am, therefore, kindly requesting the IMF to convert and disburse SDR equivalent of US$50 million for the immediate purchase of agricultural inputs for the 2009/2010 cropping programme."

The letter is copied to the Chief Secretary to the President and Cabinet, Dr Misheck Sibanda; IMF director for the Africa department Ms Sayeh Antoinette; and IMF executive director for Africa Group 1 constituency Mr Samuel Itam.

SDRs are special drawing rights, the IMF currency.

In his letter of November 13, Minister Biti gave the following breakdown of how the money would be used:

• US$250 million to clear certain IMF arrears, demonetisation, and other 2010 National Budget projects

• US$105 million for rehabilitation of Hwange, Zesa, National Railways, hospitals, the education sector, roads, water and sanitation projects, and lighting

• US$50 million for grain procurement lines of credit

• US$100 million for manufacturing, mining, agro-processing, construction, transport and ICT lines of credit

The total was US$505 million and he did not say what would happen with the balance of US$5 million.

Dr Gono in September proposed that the SDRs be converted and used for mining, manufacturing, tourism, agriculture, public utilities and clearance of IMF arrears.

Minister Biti said the money would only be allocated in the Budget but this past month suddenly saw the urgency of financing inputs procurement when many farmers have already lost hope of getting meaningful yields from the summer season.

"The challenge that Government is facing is mobilisation of resources for financing the 2009/2010 agriculture season.

"Therefore, with respect to (grain procurement), an agricultural inputs procurement allocation of US$50 million will be made in the 2010 National Budget.

"It will be appreciated if the Fund can immediately convert and disburse SDR equivalent of US$50 million for the purpose of purchasing agricultural inputs for the 2009/2010 agricultural season as well as approve the other proposed allocations of the SDRs."

Yesterday, Government sources said: "There has been a sustained and growing campaign to make Minister Biti realise the urgency of the matter.

"It has finally paid off, but it is a case of too little too late. By the time that money comes we could be well into January and who is going to be buying seed then?"

The sources said the provision of inputs had occupied centre stage in Tuesday's Cabinet meeting after which Minister Biti dispatched the second letter to the IMF.