How Zim will spend SA's R3.2bn
2005-08-07 11:02
Johannesburg - An agreement has been reached between SA and Zimbabwe about a loan of up to half a billion US dollars to assist the country to deal with its economic meltdown.
According to City Press the meeting between SA and Zimbabwean treasury officials on Thursday was short and there was agreement on all issues, including SA's prerequisites on assistance.
Government spokesperson Joel Netshitenzhe confirmed that a meeting between officials of the two countries took place this week. He said details of the meeting were not a subject for media debate.
Zimbabwean government spokesperson George Charamba was unavailable for comment on Saturday.
Zimbabwe asked for a $1-billion loan last month. The SA Cabinet this week approved the loan request in principle. Netshitenzhe told the media on Wednesday that the amount that would be granted would be "far less than the $1-billion".
City Press has established from highly reliable sources that in terms of the draft agreement, Zimbabwe will have a loan facility of between $200 and $500 million.
About $160 million of this will be used to repay the International Monetary Fund arrears immediately after the signing of the agreement, while the rest will finance much-needed resources for the country, such as fuel, seeds and fertilisers for the approaching planting season.
Payments will be phased: the IMF arrears will be paid immediately, and the rest would be dependent on Zimbabwe's acceptance of prerequisites and their implementation.
These include an insistence that the money be used to create a sustainable economic recovery programme and unlocking the political logjam, senior SA government sources said yesterday.
"The idea is to ensure that they do not come back next year with the same problem," one source said.
It is understood SA is not insisting on the resumption of talks with the MDC but rather emphasising the need "to interact with all roleplayers to ensure economic and political stability.
"It is wrong to think that the SA government can tell the Zimbabean government who to talk to, but what is being said is that there was a draft constitution produced following talks between government and other parties that would unlock the political logjam and we think it should be implemented," a source said.
Other issues that SA is insisting on include freedom of the media and of association.
Zimbabwe has up to the end of the month before its membership of the IMF is ended and this means the agreement would have to be signed at the earliest this week or within the next two weeks to unlock the money.
President Robert Mugabe went to China two weeks ago for financial help but has seemingly failed to secure it.
The militant rhetoric from both Mugabe and his Cabinet colleagues that they would not accept financial help with strings attached has been dismissed as posturing to the public.
SA officials say the monitoring of implementation of the agreement was going to be crucial as they feared that Mugabe might renege. Thus, money other than that going to the IMF, would be linked to phases of the implementation of the agreement.
This would mean the talks "with all roleplayers" would have to begin and legislative drafts to ensure a free media and free political process have to be tabled in parliament before funds are released. The implementation of the draft constitution also needs legislative chnages to the structure of government and these would have to be tabled before parliament.
"Sometimes one gets the impression that the Zimbabweans feel that because we (SA) cannot allow a total breakdown in their country in our own national interest, then they can take advantage of that and promise things they later do not do. That time is gone," another senior source said.