HomeNewsZim seeks 3,3bn rand overdraft from South Africa

Zim seeks 3,3bn rand overdraft from South Africa


Zimbabwe is seeking 3,25 billion rand in an overdraft and credit facility from South Africa, Finance minister Tendai Biti said yesterday, as the country battles to reverse the effects of a decade-long political and economic crisis.

A power-sharing government set up last year by bitter rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai has stabilised an economy ravaged by hyperinflation, which peaked at 500 billion percent in December 2008.

But the government says it needs at least $10 billion for reconstruction.

Biti told business executives in Harare that the government was looking to negotiate with South Africa’s government for financial assistance after agreeing terms for a $70 million credit line with Botswana.

The government has so far failed to attract significant funds from Western donors, who are demanding more reforms before providing aid to the unity government.

“In South Africa there are two facilities that we are negotiating; one is a line of credit of 500 million rand, one is a revival of an old overdraft facility of 2,75 billion rand,” Biti said, adding that he would soon visit the country for discussions.

“We are also talking to private capital, the banks, and the general understanding is that now that the South African and Zimbabwean Bippa (Bilateral Investment Promotion and Protection Agreement) has been ratified by the South African parliament there should be movement and traction on that.”

The agreement, which was signed last November, protects investments from expropriation and provides the opportunity for aggrieved investors to seek redress in international courts.

Biti said the government was still struggling to raise revenues in the recovering economy, collecting an average $140 million a month, the bulk of which went on wages for public workers. —Reuters

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