Zimbabwe Sets Aside KSh 64.85B Drought Reserve: Treasury Cuts 2027 Growth Forecast to 3.50%Zimbabwe Sets Aside KSh 64.85B Drought Reserve: Treasury Cuts 2027 Growth Forecast to 3.50%
Key Highlights
- Finance Minister Mthuli Ncube plans a KSh 64.85B ($500M) reserve, split between cash and grain purchases, to cushion Zimbabwe from an expected El Niño drought, with funding due in the 2027 budget.
- The government has cut its 2027 growth forecast to 3.50% from 5.00%, as the maize harvest is projected at 1.6 million tonnes, nearly 30% below 2026.
- Zimbabwe needs about 2.2 million tonnes of maize a year, so a thin harvest could push the country into regional grain markets that Kenyan importers also use.
Zimbabwe plans a KSh 64.85B ($500M) cash and grain reserve to limit the damage from an expected El Niño drought, and has cut its 2027 growth forecast to 3.50% from 5.00%, Finance Minister Mthuli Ncube said on 14 October.
The announcement signals that Harare expects a poor harvest next year and wants to buy grain before prices rise. For East African traders and food importers, a drought in southern Africa can tighten regional maize supply and lift prices well beyond Zimbabwe's borders.
How the reserve would work
Reuters reports that the reserve would hold KSh 32.43B ($250M) in cash and KSh 32.43B ($250M) for grain purchases. Reuters, as carried by CNBC Africa says the money would be provided for in the 2027 national budget, which the minister said is due next month.
The stated aim is to limit the effect of an El Niño-induced drought on national food security. No detail has been given on how the cash half would be used, or whether it would sit in the central bank or a Treasury account.
A harvest projected 30% lower
The government projects the 2027 maize harvest at 1.6 million tonnes, nearly 30% below the 2026 crop. Zimbabwe needs about 2.2 million tonnes of maize a year, including roughly 400,000 tonnes for livestock feed, which leaves a gap of about 600,000 tonnes on those figures.
The state has already bought about 200,000 tonnes from local farmers for strategic grain reserves. In 2024 Zimbabwe declared a national disaster after an El Niño drought left millions needing food aid.
What it means for Kenyan readers
El Niño risk is already on the radar of regional forecasters. The IMF named a strong El Niño among its main downside risks, as Mwenendo reported in its coverage of the Fund's Africa growth outlook.
Food costs are already climbing elsewhere in the region. Mwenendo earlier reported on how Rwanda's inflation reached 17.2% as vegetable prices jumped. A weak southern African maize crop could add to that pressure if buyers compete for supplies.
The figures come from Reuters' account of the minister's briefing; the full budget numbers will only be known next month. Amounts converted at about KSh 129.70 to the dollar.
In Summary
- Who announced the plan?
- Zimbabwe's Finance Minister Mthuli Ncube, at a briefing reported by Reuters.
- What is planned?
- A KSh 64.85B ($500M) reserve: KSh 32.43B ($250M) in cash and KSh 32.43B ($250M) for grain purchases.
- When will it be funded?
- In the 2027 national budget, due next month (November 2026). The plan was announced on 14 October.
- Where does it apply?
- Zimbabwe, with possible knock-on effects for regional maize markets.
- Why is it needed?
- To limit the impact of an expected El Niño drought; the 2027 maize harvest is projected at 1.6 million tonnes, nearly 30% below 2026.
- How has the economy outlook changed?
- The 2027 growth forecast was cut to 3.50% from 5.00%, citing El Niño's effect on agriculture.
