Australia will provide $5 million to Zimbabwe for business grants despite its continuing condemnation of the impoverished nation's president, Foreign Minister Stephen Smith says.

Mr Smith said the federal government had pledged the contribution through the Africa Enterprise Challenge Fund (AECF), an African-wide initiative led by the United Kingdom and the Netherlands.

The fund provides matching grants to private-sector businesses for commercially viable projects which cannot get finance.

The contribution would help finance private activities to boost the country's rural economy and address long-term food security needs, Mr Smith said.

"Humanitarian need in Zimbabwe remains enormous," Mr Smith told reporters on Monday.

Mr Smith, who has long been critical of Zimbabwe's president Robert Mugabe, said Australia was committed to assisting Prime Minister Morgan Tsvangirai and his ministers rebuild Zimbabwe.

"Australia continues to be concerned by the grave situation in Zimbabwe: there must be an end to politically motivated acts of violence and intimidation, human rights and the rule of law must be respected; constitutional law must proceed unhindered," he said.

"We continue to be very concerned about the ongoing conduct of President Mugabe.

"We welcome very much that South Africa through its new president is taking a very keen interest in the oversight of the Global Political Agreement," he said, referring to the pact that paved the way for power-sharing in Zimbabwe.

Australia has financial and travel sanctions in place to target individuals complicit in the brutality of Zimbabwe's past and who continue to obstruct economic and social reforms.

The latest contribution boosts Australia's aid to Zimbabwe to $33 million since February 2009 when the inclusive government was formed.