Zimbabwe agrees first post-Mugabe loan deal with China
Emmerson Mnangagwa, who was sworn in as president on Nov. 24 after a de facto military coup ended Robert Mugabe’s 37-year rule, has vowed to rebuild the country’s ravaged economy and re-engage with the international community.
The deal means “we are back in business to build the capacity to honour our obligations not only to China but also to our international creditors,” Chinamasa said.
Chinamasa, who was re-appointed to the finance ministry post last week, admitted that the country had failed to repay China for previous loans. But he said Beijing was still willing to deal with Zimbabwe.
“The Chinese government understands the economic situation we are going through,” he said. “We’re under sanctions and had no lines of credit coming into the country. This is why we call them ‘all-weather friends’.”
Chinamasa is scheduled to present the 2018 national budget on Thursday.
He had been finance minister since 2013 until he was shifted to the new ministry of cybersecurity in October. During his time in charge, the economy stagnated. A lack of exports caused acute dollar shortages that crippled the financial system and led to long queues outside banks.
The issuance of billions of dollars of domestic debt to pay for a bloated civil service – a key component of the ZANU-PF patronage machine under Mugabe – also triggered a collapse in the value of Zimbabwe’s de facto currency and ignited inflation.
One of Mnangagwa’s most pressing tasks will be to patch up relations with donors and the outside world and work out a deal to clear Zimbabwe’s $1.8 billion of arrears to the World Bank and the African Development Bank.
($1 = 6.6138 Chinese yuan renminbi)
Reporting by Emelia Sithole-Matarise, editing by Larry King