China has denied that it is about to begin negotiations for a $2-billion loan to cash-strapped Zimbabwe, reports said on Thursday.
Last week Zimbabwe’s ambassador to China, Christopher Mutsvangwa told Zimbabwe’s Herald newspaper that the Asian economic giant had assigned an official to begin talks on the loan with Zimbabwe’s finance minister and central bank governor.
But on Thursday the paper quoted Chinese Foreign Ministry spokesperson Qin Gang as refuting the claim.
”After seeing this news, we looked for confirmation with the relevant departments and there is no such deal,” the spokesperson said.
The loan would have been the biggest financial injection ever received by the Southern African country from a donor.
Doubts have also been cast over Mutsvangwa’s earlier claim that China had made a bid worth $3-billion for a stake in the country’s failing iron and steel company Zisco.
Zimbabwe is desperate for foreign currency to import fuel, food, medicines and electrical power all of which are in critically short supply.
The Zimbabwe economy has been hard hit by the effects of a controversial land reform programme launched in 2006, which has cut production in the key agricultural sector.
Inflation is now close to 1 100%, the highest rate in the world.
Zimbabwe stopped receiving loans from the International Monetary Fund several years ago due to unpaid debt arrears and Harare’s refusal to follow the funds prescriptions for halting the country’s economic slide. – Sapa-DPA