Zim pays almost R2bn to service Chinese loans

Harare - Zimbabwe has spent $180m (about R2bn) in unbudgeted expenditure to service outstanding loans from China in an effort to improve relations and encourage new financial support, Finance Minister Patrick Chinamasa said on Wednesday.

"In the first six months of this year we have had to cough up $180m, which was not in the budget, just to make ourselves look good," Chinamasa told business leaders in Harare.

Chinamasa last month accompanied President Robert Mugabe on a state visit to China where the veteran leader sought support to help a struggling economy.

China and Zimbabwe signed several cooperation deals during a visit to Beijing by long-time Zimbabwean President Robert Mugabe, Chinese media reported late on Monday.

Official data show China has extended $1bn in loans to Zimbabwe since 2009 and trade between the two nations rose to $1bn last year from $300m five years ago.

In August Reserve Bank of Zimbabwe governor John Mangudya said exports, mostly minerals and tobacco, were down 13% in the first half of the year, to $1.3bn, compared with the first six months of 2013.

China will help Zimbabwe build special economic zones and industrial parks to jump-start exports and a struggling economy, its ambassador to Harare said on Thursday as a Chinese firm started expanding the country's largest hydro-power plant.

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