HomeBusiness DigestZim Asks for $2B to Salvage Economy

Zim Asks for $2B to Salvage Economy

ZIMBABWE’S request for a US$2 billion loan to salvage its collapsed economy and infrastructure was expected to dominate a two-day conference of the 15-nation Southern African Development Community (Sadc) in Cape Town, South Africa.

South African Finance minister Trevor Manuel told South African radio that Zimbabwe wanted about US$1 billion to kick-start retail and other sectors, and the rest to help reopen schools and restore health and municipal services.

An estimated two-thirds of Zimbabweans are in need of food aid and a cholera epidemic has sickened more than 80 000 people and killed more than 3 800 since August.

But South Africa has only limited resources to help its troubled neighbour, as it is heading into recession. Other southern African countries are also reeling from the global economic downturn, and there is scepticism about how Zimbabwe would use the money.

The head of the African Development Bank, Donald Kaberuka, said Zimbabwe also must settle its existing debt before it could expect huge foreign aid.

“It is important not to jump off the bridge before there is enough water under it,” he told reporters in Cape Town.

He said Harare owed the African Development Bank nearly US$460 million. “That has to be fixed before we do anything else,” he said.

He said Zimbabwe’s debt to the international community was about US$5 billion and by next year would be closer to US$6 billion.

“What is owed to the international financial institutions must be settled in advance, before we move in. That can be done fairly quickly. It is complex, but its not undoable,” Kaberuka said. — AP

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