The Cabinet has confirmed South Africa’s willingness, in principle, to assist Zimbabwe, including providing a loan facility in relation to Zimbabwe’s obligations to the International Monetary Fund.
Briefing the media after Cabinet’s fortnightly meeting on Wednesday, government communications head Joel Netshitenzhe said the government’s approach on the issue is premised on the principle that such assistance should benefit the Zimbabwean people as a whole, ”within the context of their programme of economic recovery and political normalisation”.
Further, the government will work with the United Nations and South African religious leaders to provide emergency humanitarian assistance, particularly in the aftermath of the controversial clean-up campaign that has left an estimated 700 000 Zimbabweans homeless, he said.
He said this could include discussions about food, seed and pesticide assistance.
South Africa will continue talks with Zimbabwean officials on the matter of its requirements for a loan, Netshitenzhe said.
He said the Cabinet was briefed on Wednesday on ”the ongoing interaction between South Africa and Zimbabwe on the assistance that South Africa can provide to that country”.
The loan facility is about ”a 10th” of the figure reported in the media, he said, which would put it at about $100-million (R646-million).
Netshitenzhe noted that the International Monetary Fund has given Zimbabwe about four weeks to settle the matter of its recalled loan — of about $1-billion.
He said discussions ”this week” will involve the national Treasury and central bank officials from both sides.
Asked if any conditions will be imposed, he said South Africa is not in the business of imposing conditions or behaving like ”big brother”, but the discussions are based on the understanding that the economic difficulties will not recur and the loan will be provided in the interests of the Zimbabwean people.
Zim ‘won’t be able to repay loan’
On Monday, the official opposition Democratic Alliance said there is little prospect that the Zimbabwean government will ever be in a position to repay any amount of money granted to it by South Africa
In a statement, DA chief whip Douglas Gibson said: ”The DA campaign ‘Stop the Mugabe Loan’ aims to persuade [South African] President [Thabo] Mbeki to say no. The increasing meltdown of the Zimbabwean economy provides an even stronger case against South Africa’s granting of a $1-billion loan to [President Robert Mugabe’s] government.”
Gibson noted that the Zimbabwean dollar has experienced its largest crash in recent history and is now trading at a desperately low Z$17 000 to the dollar.
”The real extent of the currency crisis facing our northern neighbour is revealed by the fact that it is trading on the parallel market at a dismal Z$45 000 to $1,” he said.
”The likely result of the currency collapse is that the Zimbabwean economy now faces the prospect of hyper-inflation, with an inflation rate of over 1 000% predicted by the end of the year.
”That means that any loan or financial assistance afforded to Zimbabwe should be viewed as a gift to the Mugabe regime. This would constitute a completely unacceptable state of affairs given the desperate social and other needs that this money could be used to address here in South Africa.
”Even if South Africa does grant a loan of $1-billion, this will simply be a cosmetic gesture and will not even come close to addressing the structural weaknesses so evident in the Zimbabwean economy.
”The implosion of the Zimbabwean economy is a direct result of the deliberate mismanagement of President Mugabe and his ruling Zanu-PF.
”The Mugabe government has single-handedly destroyed Zimbabwe’s once-vibrant agricultural sector, spent millions of dollars on its ill-fated military involvement in the Democratic Republic of the Congo conflict, paid out unaffordable public-sector wage increases for reasons of political gain and, most recently, ensured through Operation Murambatsvina that it has also destroyed the once-thriving informal sector of the economy.
”The dire state of the Zimbabwean economy can only be addressed by devising a political solution which, by necessity, must include the departure from office of President Mugabe.
”The government must also continue to lobby the United Nations and other relevant relief agencies to address the growing humanitarian crisis in that country.
”Sending money to Zimbabwe to prop an increasingly despotic and cruel leader will serve no long-term purpose other than prolong the suffering of the Zimbabwean people,” said Gibson. — Sapa, I-Net Bridge