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SA tightens loan conditions on Zim

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South Africa has adopted a carrot-and-stick approach after Zimbabwe asked for $100 million in budgetary support from the region’s economic powerhouse.

South Africa has adopted a carrot-and-stick approach after Zimbabwe asked for $100 million in budgetary support from the region’s economic powerhouse.

By Bernard Mpofu Chief Business Reporter South Africa’s Treasury on Monday said it could only open its purse to Zimbabwe if the country negotiates for financial aid in the letter and spirit of the Global Political Agreement, which gave birth to the coalition government in 2009.

  This follows an announcement by Finance Minister Tendai Biti last week that the government would later this month take its begging bowl to South Africa seeking $100 million in aid after projected revenues had missed targets due to the underperformance of diamond revenue.

  He said Treasury was also in talks with Angola in a bid to secure $50 million from the oil-rich nation

  “The South African Minister of Finance, Pravin Gordhan, is scheduled to meet his Zimbabwean counterpart Tendai Biti this month to discuss Zimbabwe’s request for further financial assistance. “The request will, thereafter, be discussed by the South African cabinet,” the South African Treasury said in a statement.

  “The discussions will take place in the context of progress in implementing the Global Political Agreement.”

  The conditions were announced after South Africa’s main opposition party the Democratic Alliance (DA) on Sunday warned that the money could be used to finance Zanu PF’s campaign ahead of the next general elections slated for next year.

  DA international relations spokesperson Ian Davidson said in a statement that he had written to Gordhan asking that any funding to Zimbabwe must have conditions aimed at helping the country reach a peaceful political transition.

  “In particular, we cannot provide funding to Zimbabwe if (an) agreement is not reached on a new . . . constitution, or if an election before the new constitution has been finalised and agreed by all relevant parties,” he said.

  “We will also recommend that the funding is given on a ring-fenced basis for specific projects and not as a blank cheque for (President Robert) Mugabe.”

  South Africa has previously assisted Zimbabwe, contributing R300 million to the Sadc Agriculture Support Programme, a portion of which was used for the purchase of seed, fertiliser and fuel for agricultural production in Zimbabwe. It also extended R300 million as a budget support grant to Zimbabwe for the rehabilitation of municipal infrastructure, including water reticulation, health services and education.