Zimbabwean President Robert Mugabe may well choke on the tough conditions attached to any loan package offered to him by the South African government — despite Zimbabwe’s worsening foreign currency crunch.
Mugabe’s spokesperson, George Charamba, told the Mail & Guardian that Zimbabwe would not accept financial help tied to conditions, adding that South Africa was one of numerous countries Zimbabwe had approached.
”I don’t understand why the South African media is treating the loan request as unique to South Africa. We have also made representations to the Indian government,” Charamba said.
Mugabe is due to visit China this weekend and diplomatic observers believe China is the country most likely to step into the breach.
Beijing is anxious to secure access to minerals such as platinum and chrome, which Zimbabwe has in abundance, and may provide a way for Mugabe to acquire hard currency without making political concessions.
In the first clear sign that South Africa is prepared to use its economic leverage to break Zimbabwe’s political logjam, President Thabo Mbeki’s Cabinet was expected this week to discuss Mugabe’s request for a $1-billion loan facility. The International Monetary Fund (IMF), meanwhile, is taking final steps in preparation to expel Zimbabwe for its persistent failure to pay a $295-million debt.
Government officials stress that no decision has yet been taken to extend a credit line, but that any help will be based on a South African assessment of what is appropriate for Zimbabwe’s needs and will entail stringent terms.
These are understood to include the resumption of talks on constitutional reform between Zanu-PF and the opposition Movement for Democratic Change (MDC), an end to the Murambatsvina, or ”drive out filth” campaign to demolish illegal structures in urban areas, and economic reforms.
Charamba, was adamant that Zimbabwe would reject conditions, particularly a call for new talks with the MDC. ”We meet the MDC on a daily basis and dialogue with them in parliament,” he said.
”Should the MDC request talks outside Parliament, it will be considered. But firstly, they would have to clarify their call for sanctions, which are now causing untold suffering to ordinary Zimbabweans. That would be our precondition.”
He added: ”I don’t understand why South Africans will put a condition that we end Operation Clean Up when it has already ended. We are now at the next stage, Operation Hlalani Kahle (stay and live well), which will focus on housing delivery that goes beyond people affected by Operation Clean Up.”
Nevertheless, the IMF’s threatened withdrawal appears to have created a window of opportunity for the South African government to push ahead with plans for a ”carrot-and-stick” package, which Finance Minister Trevor Manuel has been quietly punting for some time.
Zimbabwe needs hard currency to buy fuel, electricity and basic commodities. With its reserves exhausted, the government has been reduced to buying dollars on the black market to fund imports.
After a visit to Harare by Deputy President Phumzile Mlambo-Ngcuka and Deputy Finance Minister Jabu Moleketi, Manuel and Reserve Bank governor Tito Mboweni met officials, led by Zimbabwe Reserve Bank governor Gideon Gono, last Friday.
South African sources said that while the Zimbabwean delegation ”painted a picture” of their currency crisis, any funding would be shaped by their own assessment of the situation. The credit facility was unlikely to amount to the reported $1-billion.
”It is far from a done deal,” one official said. ”The conditionalities will be tough and Mugabe isn’t going to like them at all.”
China is seen as Zimbabwe’s most likely benefactor, as it makes no pretence of using aid to promote democracy and good governance.
Western and African diplomats are worried that the link between economic assistance and good governance, established by initiatives such as the New Partnership for Africa’s Development (Nepad), may be undermined in China’s drive for resource security.
In 2004 it agreed to a $2-billion line of credit for Angola after an IMF loan fell through when the MPLA government would not agree to anti- corruption conditions. The loan is backed by oil guarantees and commitments to employ Chinese construction firms in the rebuilding of infrastructure.
Mugabe has already concluded agreements to buy fighter jets and riot control gear from the Chinese government. Despite these concerns, observers in Harare are buoyed by what they see as a marked difference in pace and tone from South Africa and the African Union. MDC leader Morgan Tsvangarai embarked on a hectic round of African diplomacy ahead of the G8 summit at Gleneagles, meeting, among others, current AU chairperson and Nigerian President Olusegun Obasanjo to insist on the importance of linking democratic reforms and economic recovery.
Obasanjo and Mbeki, who split in 2003 over Zimbabwe’s suspension from the Commonwealth, appear to have gone to Gleneagles united on that issue, even as Zimbabwe’s urban demolition campaign refocused international attention on the crisis.
Chief government spokesperson Joel Netshitenzhe was reluctant to give details of the Cabinet discussions or the recent meetings with Zimbabwean officials. ”The discussions have been about how we can assist in the Zimbabwean economic recovery programme as well as the normalisation of the political situation,” he said.
”There is no agreement on a loan, but if the issue arises, it would be referred to Cabinet and a loan facility would have to be confirmed by Parliament.”
Democratic Alliance leader Tony Leon, meanwhile, questioned whether South Africa could afford the loan, saying taxpayer funds should not be used to bail out a dictator.
In a speech in Cradock on Thursday, he said: ”South Africa should not provide any assistance beyond emergency relief until the Zimbabwean government meets strict conditions, including, but not limited to: ending Operation Murambatsvina; opening formal, public negotiations with opposition parties under the supervision of the African Union and the United Nations; allowing international aid agencies to operate freely within Zimbabwe; and providing proof of all purchases made with money donated or loaned by South Africa.”