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Zimbabwe Seeking $100 Million Rescue Package to Boost Economy

Finance Minister Tendai Biti says Zimbabwe is in the process of looking for a $100 million budget support package from South Africa while pressing the neighboring nation to honor its 2009 pledge to pump $500 million into the Zimbabwe economy.

Presenting the state of the economy report to the media Thursday, the finance minister said Zimbabwe is looking for credit lines in order to resuscitate the stagnant economy crippled by lack of foreign direct investment and liquidity constraints.

Biti said Zimbabwe is also negotiating with Angola for lines of credit.

He said the board of the International Monetary Fund (IMF) will soon make a decision on proposals by Zimbabwe to clear its ballooning $9.1 billion external debt through what it calls an accelerated arrears clearance and debt and development strategy.

This is a hybrid debt resolution strategy which includes the adoption of the traditional debt resolution initiatives, combined with leveraging of the country’s natural resources to achieve sustainable economic development.

Biti said the debt is blocking Zimbabwe from accessing critical funds from the IMF, the World Bank and the African Development Bank.

Locally, Biti said treasury will be aggressive in looking for resources as the budget is under-performing by $30 million a month.

The Finance Minister said the government requires $400 million for conducting a referendum, paying civil servants’ bonuses and financing of the 2012-2013 agricultural season.

Biti again expressed concern over the failure by the Ministry of Mines to remit diamond revenues to treasury.

He said last month alone, out of a total $456 million in diamond exports, nothing was remitted to treasury.

The major diamond exporters were Mbada Diamonds (Pvt) Ltd and Anjin Investments with export shipments worth $323 million.