Zim exhausts R75 million SA loan

Constantine Chimakure



ZIMBABWE is close to exhausting a R75 million loan availed by the South African Reserve Bank.


South African Fin

ance minister Trevor Manuel on Monday told parliament in response to a written question that the Zimbabwe government had by July 31 used R73,2 million of the loan facility.


Manuel said: “This facility expires on 31 December 2007 if not renegotiated. The facility is secured by a pledge of South African Land Bank bills to the value of R81,8 million.”


He said interest on the loan was linked to the South African Reserve Bank’s repo rate which has been increased by 300 basis points since June last year to 10%.


South Africa’s central bank had an arrangement with Zimbabwe, dating back to the 1960s, which made provision for a credit facility backed by Land Bank bills.


Manuel added that the Zimbabwean government had reneged on payments to the South African government for medical expenses of Zimbabwe military veterans staying in South Africa.


“Since 2000, the Zimbabwean government has not refunded these payments as specified in the agreement. As at 31 July 2007, the amount overdue was R2,2 million,” Manuel explained.


Two days later, Manuel told parliament that any economic bail-out for Zimbabwe from South Africa would have to conform to its constitution and be passed by the house.


He said South Africa’s constitution made it clear that additional money could only be withdrawn from the National Revenue Fund by going through parliament.


“So, there’s no under-the-table deal, it has to be by an appropriation and if it needs to be, by a special appropriation,” Manuel said in reply to a question on whether the government planned to commit money to assist its northern neighbour.


Zimbabwe has in the past requested a loan from South Africa, one of the countries within the 14-member Southern African Development Community tasked last month with developing an economic recovery plan for the southern African country.


About three weeks ago, Manuel said his country would not use taxpayers’ money to assist Zimbabwe to emerge from its economic problems triggered by bad governance and poor policies.


Zimbabwe’s economy is characterised by galloping inflation, high unemployment, chronic shortages of food, fuel and foreign currency, and rampant corruption. Inflation is at over 7 600%.