How the implementation of Monetary Policy imposed on 6 June affects NGOs in Zimbabwe.
Posted on 12 June, 2023 at 10:19
Resolutions
of the monetary policy committee meeting held on 6 June 2023.
Monetary
policy refers to the actions taken by the central bank of a country to
stabilize and regulate the economy through the management of inflation and
interest rates, among other tools. These policies have a significant impact on
the operations of non-governmental organizations (NGOs), which often rely on
funding and donations to carry out their social missions. In this article, we
will explore the ways in which monetary policy affects NGOs and discuss the
challenges and opportunities it creates for these organizations.
First
is the impact on funding sources NGOs often rely on donations and grants from
government agencies, foundations, corporate and individual donors, and
international organizations. Monetary policy affects funding sources for NGOs
in several ways. For example, the government has increased its interest rates from 70%
to 75% per annum, and individuals and corporations may prefer to save money rather
than donate to NGOs. On the other hand, if interest rates are low, donations
may increase as donors seek to invest in charitable causes. Additionally,
changes in exchange rates by the Reserve Bank of Zimbabwe can affect the value
of grants from international organizations, making them more or less valuable
to NGOs.
Secondly
are increases in competition for funding NGO funding is often limited, and
monetary policy changes where increased in statutory reserve requirements,
interest rates, and bank policy rates can create greater competition for limited
resources. NGOs have to compete with other organizations to secure funding, and
those with greater financial resources may have an advantage in navigating
changes in monetary policy. Smaller NGOs may struggle to find enough funding to
maintain their operations and may be forced to reduce their staff or limit
their programs.
Inflation
and cost of living monetary policy changes can also impact the cost of living
and inflation, which affects NGOs that provide essential services such as
healthcare, education, and poverty reduction. Inflation can lead to higher
costs for these organizations, making it difficult to deliver goods and
services at an affordable rate. Additionally, higher costs of living can make
it harder for NGOs to recruit and retain staff, particularly in regions with
high living expenses.
More so
opportunities for innovation are affected despite the challenges that monetary
policy creates for NGOs, it also provides opportunities for innovative
solutions. For example, if interest rates are low, NGOs can take advantage of
this to access cheaper loans for expansion or new programs. Additionally, NGOs
may be able to partner with financial institutions offering social impact
investment funds, which can provide them with access to additional funding
channels and more stable capital.
In
conclusion, monetary policy affects NGOs in various ways, impacting their
funding sources, competition for limited resources, cost of living, and
inflation. While these changes can create significant challenges for NGOs, it
also provides opportunities for innovation. NGOs must remain vigilant and adapt
to these changes by exploring new approaches to funding and service delivery,
and learning to navigate the complex monetary policy landscape to ensure their
social missions remain intact…
This
is why KFM Consultants is here to assist you with resource mobilization strategies
and PVO registrations, with the help of our dedicated and experienced team of
consultants are here to help your NGO thrive!
Contact us today on;
Phone:
0773118699; +263 242 306 315
Email:
information@kfm.co.zw
