Posted on September 27, 2005

Loans to Zimbabwe ‘An Insult’ — DA

Mariette LeRoux, SAPA, Sept. 27

A loan to Zimbabwe would amount to an endorsement of that country’s erosion of the rule of law, South Africa’s opposition Democratic Alliance said on Tuesday.

“It appears that despite (Zimbabwean President) Robert Mugabe’s apparent rejection of any conditions, the South African government is bending over backwards to tailor a package acceptable to Mugabe,” it said in a statement.

“This kind of fawning attitude towards a power-hungry dictator is not only unbecoming, but also an insult to the suffering he has imposed upon millions of Zimbabweans.”

The National Treasury earlier said Zimbabwe has not rejected financial assistance from South Africa, and talks on the matter were ongoing.

“We have not broken off discussions,” spokesperson Logan Wort said.

The fact that Zimbabwe had managed to raise the funds to pay US$120-million (about R768-million) towards its International Monetary Fund (IMF) arrears did not change the fact that it needed financial help, Wort said.

Other assistance required included the immediate alleviation of food shortages and funding for agricultural inputs “so the country can have food next year”.

The talks were focusing in large part on Zimbabwean plans for the restructuring of that country’s economy. Previous indications were that the assistance was likely to come in the form of a loan and grants.

Wort could not say how much money was involved.

Recent estimates of about US$400-million would now in all likelihood exclude the money already paid to the IMF.

There was no indication of when the talks, led for South Africa by Finance Minister Trevor Manuel and SA Reserve Bank (SARB) governor Tito Mboweni, would be concluded.

Neither the SARB nor the Government Communication and Information System (GCIS) was prepared to comment on Tuesday.

The DA said the South African public deserved to know whether money would be loaned to Zimbabwe.

“It is, after all, money belonging to the South African taxpayer which might be sent to a nation where the president and his government only honour agreements in the breach.”

DA foreign affairs spokesperson Douglas Gibson said that there had been several contradictory statements from senior government officials, including Manuel and Mboweni, about the talks and the nature of the proposed assistance.

A subsequent “clampdown on the flow of information” meant that South Africans were increasingly reliant on information from Harare.

Recent statements attributed to Zimbabwean central bank governor Gideon Gono begged the question whether South Africa was “determined to press ahead with the loan, despite Zimbabwe’s obvious reluctance to accept any conditions”, Gibson said.

The Zimbabwean Herald Online quoted Gono on Tuesday as saying talks on assistance from South Africa were ongoing.

“As the central bank, we are looking forward to the conclusion of the negotiations that will replenish our coffers accordingly,” he said.

“The assistance from South Africa is in the form of a loan which will have to be repaid at some stage in the future from our mineral, agricultural, tourism and manufacturing exports.”

The DA reiterated its opposition to any loan to Zimbabwe, but said strict conditions should be imposed otherwise.

Gono said most of Zimbabwe’s payment to the IMF came from banks in New York and London.

The funds had been sourced from export proceeds, free funds and foreign currency liquidations, he said.

Recent reports have said the IMF intended verifying the origin of the money.

Gono gave details of the sources of the funds to IMF directors in Washington on the eve of a September 9 executive board meeting to decide on Zimbabwe’s fate.

Of the funds, US$90-million was paid through the Federal Reserve Bank of New York, with the balance being transacted through Absa Bank of South Africa.

Zimbabwe reduced its arrears with the IMF to US$175-million with last month’s payment. This swayed the majority of the IMF’s executive directors to vote against the country’s expulsion and grant it a six-month reprieve.

Gono said it was unfortunate that some quarters felt offended by Zimbabwe’s ability to pay part of its arrears from its own resources.

“The fact that we surprised everyone with the payment should not in itself cast doubt on our creativity and ability as the central bank and, indeed, the nation’s resolve to take sacrificial measures in the wake of threats to national interests.”

He made an undertaking to clear the arrears by November next year.