South Africa turned down a $1.2-billion loan request from Zimbabwe for in December, Jabulani Sikhakhane, spokesman for the finance ministry said on Monday.
“South Africa doesn’t have that kind of money,” Sikhakhane said.
Speaking to the Sunday Times, treasury director general Dondo Mogajane said South Africa declined the request because the country is also in a difficult financial position and there are concerns of Zimbabwe defaulting on the loan.
“Initially they wanted $1.2-billion. We don’t have $1.2-billion but we have is the will to assist them,” Mogajane said. He added that South Africa would assist where possible in opening trade lines, which the two countries do not currently have.
South Africa has pledged to assist Zimbabwe through trade and is in discussions with the Paris Club — which comprises the International Monetary Fund (IMF), World Bank, the African Development Bank (AfDB), the European Commission, the Asian Development Bank the Organisation for Economic Co-operation and Development and the UN Conference on Trade & Development.
Zimbabwe is in arrears with the AfDB, the IMF and the Word Bank.
Despite assertions that “Zimbabwe is open for business”, 15 months after President Emmerson Mnangagwa took office after deposing long-time president Robert Mugabe, the country has been battered by foreign-exchange and fuel shortages, strikes and a stagnant economy which shows no signs of abating.
Last week, the country was hit by deadly anti-government protests after a nearly 300% hike in fuel prices, sparked a general strike, along with widespread protests, which in many areas was characterised by violence, destruction of property and looting. Thousands took to the streets, with the bulk of the violence concentrated in and around main opposition strongholds in the capital Harare and Bulawayo. Smaller protests appeared in cities elsewhere across the country. In response, the government ordered a vicious clampdown — deploying the police and the military with deadly results.
Mnangagwa was slated to visit Russia, Belarus. Azerbaijan and Kazakhstan but on Sunday said he would skip the World Economic Forum in Davos to address the crisis.