JOHANNESBURG — South Africa has not made a final decision on the request by Zimbabwe for a loan, but Treasury is considering various possible forms of assistance to the country’s neighbour, Finance minister Pravin Gordhan said yesterday.
REPORT BY BDLIVE
Zimbabwe’s Finance minister Tendai Biti said in September he was seeking a $150 million loan from South Africa and Angola as part of a general appeal from his country to the 15-nation Southern African Development Community. Biti has to plug a $400 million deficit in Zimbabwe’s Budget for this year after diamond mining firms operating in Marange failed to provide government with an expected income of $600 million.
Congress of the People MP Smuts Ngonyama wanted to know whether “in light of Zimbabwe’s inadequate fiscal governance” the government had made a final decision to grant it. In a written reply to the question in Parliament, Gordhan said he had met Biti in September and had discussed “a number of possible forms of assistance that South Africa would explore, including a credit line, budget support, development finance from the Development Bank of Southern Africa, and other areas of technical support and co-operation.”
Gordhan said Treasury was currently undertaking the necessary consultations and review of the various forms of assistance to Zimbabwe. “The process is ongoing,” he said. Last week South African Minister in the Presidency in charge of the National Planning Commission, Trevor Manuel, told NewsDay in an exclusive interview that there must be tradeoffs for the loan that Zimbabwe had requested. He said South Africa could not throw money at bad policies.
“Money is tight,” he said. “There has to be tradeoffs and mutual gains. Nobody can throw good money at bad policies or practices. That would simply be irresponsible.” Manuel was guest speaker at the increasingly popular AMH Conversations, where he discussed “Africa and the European Financial Crisis — Opportunities and Risks” on Monday.
