China starts granting Funding for Zimbabwe

Financially troubled Zimbabwe expects to conclude negotiations for a comprehensive financial aid with long-time ally China in the next three months as President Robert Mugabe’s government seeks to revive a slowing economy, the finance minister, Patrick Chinamasa, said. As previously reported (“*see Into SA News Corner on 9 February 2014*(eNEWS on Zimbabwe, 9 Feb 2014)”: the Zimbabwean government requires US$ 27bn – more than twice the size of its economy – to fund a five-year plan to improve basic services and rebuild the impoverished country, also referred to as ZimAsset.

The Finance Minister told journalists that he had travelled to Beijing for a week last month to negotiate for money that the government wants to boost the shaky economy. “During the visit we agreed that the government of the People’s Republic of China and the government of Zimbabwe are working towards a comprehensive financial package and (we) committed ourselves to finalising the matter within three months,” Chinamasa said, declining to give details. Shunned by Western governments and funding institutions such as the World Bank because of its failure to repay billions of dollars of debt, Harare is increasingly looking to China for financial help.

China, meanwhile, covets Zimbabwean mineral resources. The landlocked country has the world’s second largest reserves of platinum along with huge deposits of gold, alluvial diamonds, coal and chrome. In March 2011, China already signed nearly US$ 700m in loan deals with Zimbabwe, its biggest such package to date, but which pales in comparison to the current needs. This loan was followed by another grant by China of US$ 23m, which was granted today for the sole purpose of assisting with infrastructure construction projects in the rural areas of Zimbabwe.

The sell-out to China has begun!

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